$200k net passive income

[kathryn d]

All very interesting.

I have recently moved to my "pre-retirement" role. 1month on 1 month off. What I have noticed is on the month off just how much more I spend. I believe I live quite modestly, I don't like gadgets or shopping etc. but I don't live frugally either (I'm no Katherine). But with so much time, what do you do? I travel, eat, travel, enjoy. It's not a cheap lifestyle.

We tend to spend more when travelling too.
In the past 20 days we spent
$118.01 groceries
$139.25 cafe

This is more than our average of $50 week, but are happy with it.

Yesterday we left our housesit and are wandering around for a couple of days before our next one starts. We ended up in a really nice area that said no camping, but we did anyways. There was no one there but us chickens (a song that is rumbling around in my head)..but in this case it was 3 kookaburras,a crow and a magpie. They joined us while we ate supper. Then we played a couple of games of Scrabble. The van was positioned so the morning sun shone in to wake us up...decided 5:30 was too early, and slept until 7.
The chickens joined us while we ate our bacon and eggs.

We stopped at a cafe along the way for a cup of coffee..ended up with crappachinno. We asked, but they didn't have instant (sometimes they do).
What a waste of $9.

Tonight we checked into a caravan park. Not nearly as nice as last nights accommodation, but we do like hot showers occassionally

We travel a lot in the countryside. Some roads are very scary (I'm afraid of heights) but the scenery is worth it, after we arrive. Todays roads were 15% incline.
Australia has some beautiful trees..I love the jacarandas

 

[D.T.]

We tend to spend more when travelling too.
In the past 20 days we spent
$118.01 groceries
$139.25 cafe

The fact that you even know this

 

[kathryn d]

The fact that you even know this

I've been keeping track of it daily...what else do I have to do

 

[Ace in the Hole]

Time to get some self control back.....
Almost doubled your average daily budget of $7 for the past 20 days !!!
Do you feel guilty?

 

[TMNT]

Foe the average Joe saving a million I'd say is near impossible through a payg job

But having 100k passive income is not average

The average Aussie pays off their house in their late 50s iirc and have zero or one ip
They jave to work to 65 and then live frugally on their pension and super until they die

A passive income of 100k or more is not average

I'd say being on this forum Already makes you above average

 

[kathryn d]

Time to get some self control back.....
Almost doubled your average daily budget of $7 for the past 20 days !!!
Do you feel guilty?

yes !!!
but it is such a fun feeling.

If we were really frugal, that cafe budget, would pay for another 15 days of groceries

Yesterday Rob asked if i wanted a box of strawberries..I said I don't want to spend $5 (approx) on them.
We knew we were going to the Big Orange, and we bought a box today for 89cents.

has anyone been there? (between brisbane & toowoomba)
They have really cheap produce...and another market across the road from it.

 

[Deltaberry]

Most people don't get this part.
How long does it take to save $1m from a salary.

If you have the assets, and get the asset cycle right, it becomes quite easy.

It was a real eye opener to me (and it was a Chinese person that opened my mind)

Exactly!!

If you have an average salary, and you're not going to venture into any business anytime soon, it seems the only way to break into at least $1 million is through capital gains.

Too many people simply don't get it, or they disregard it when the make investment/consumer decisions.

 

[o0o]

We tend to spend more when travelling too.
In the past 20 days we spent
$118.01 groceries
$139.25 cafe

This is more than our average of $50 week, but are happy with it.

Do you guys really average $50pw each on groceries? What are you saving your money for? I hope it's not a personal question but i'm genuinely curious

If you have an average salary, and you're not going to venture into any business anytime soon, it seems the only way to break into at least $1 million is through capital gains.

Too many people simply don't get it, or they disregard it when the make investment/consumer decisions.

I think that's pretty obvious.

 

[cimbom]

$100/week for groceries for 2 is not *that* low. We spend ~$120 a week for everything and that is without putting any effort into saving money besides preparing a meal plan (which is more so I know what to make rather than being a cost saving measure). Unless you buy lots of frozen or premade meals, I'm not sure how you could spend significantly more.

 

[buster]

You have missed a few vital points here by overlooking the big picture.



To reiterate.



I'm curious re: iPhone. How much did it cost 30 years ago to have better communications than the US president, instant access to the entire sum of human knowledge, maps of the entire planet, the computational power of a supercomputer the size of a room, the ability to carry around 1000 books in your pocket, the ability to access video that was shot minutes ago on the other side of the world without a tv...etc

A decent set of encyclopedias cost about $3,000.

 

[buster]

Depending on your age, $100k (net) is not that comfortable.

If you have 3 kids and need to send them to private school, that's already $60k. If you have a $1m house and a $500k mortgage, you'd pay at least $35k in repayments and interest.

Leaves you with $5k for food and electricity and transport.

Not necessarily, if you have your 500k mortgage invested in a cash flow neutral investment increasing in value at 8% you might find you have another 30k you can draw on.

 

[jackbak]

Do you guys really average $50pw each on groceries? What are you saving your money for? I hope it's not a personal question but i'm genuinely curious

With all due respect this has been covered thousands of times in other posts...

 

[kathryn d]

Do you guys really average $50pw each on groceries? What are you saving your money for? I hope it's not a personal question but i'm genuinely curious

No, it is usually $50 a week for the 2 of us.

As others have said, if you don't buy a lot of frozen or premade things, it isn't hard. We do buy these things, but when they are on sale, or drastically reduced.
We never go get groceries..per se.
We shop for specials and discounts..and if we need something for a recipe, we do add it in.

We eat a variety of meat, fruits, veggies,and cheese.

We aren't saving our money for anything. This is how we live.It's second nature.
Shopping as entertainment is torture for me...it bores me to death.

 

[TMNT]

im late 30s,

when I was a kid,

an international flight was like $2000-$3000 in back then dollars,
we didnt pay for internet,
we didnt pay for a mobile per person
Ipad! yeah right!!!

Food/groceries were about half/third
petrol about half/third
TV 60cm CRt which was one of the better models, I splashed out $1500 in bak then dollars
Cars were about 40% cheaper so about the same in terms of income ratio

However, household appliances and basically stuff thats imported in china was expensive, eg a toaster was like $60, now you can buy it for like $10 at kmart,


so unless you were travelling overseas, I think its far cheaper to live back then since you dont replace toasters all the time

now a mobile is necessary, so is internet, appartenly every 8 year old needs an ipad,

and most early 30s FHO need a 4 bdr with media room, and must be within 30 kms of the cbd and a backyard, plus house cannot be more then 30 years old

 

[the_captain]

I agree $200K is a good number.....here is why

$80,000 = 8% interest only on a $ 1 Million mortgage - have a nice house in a desirable location

$30,000 = current year 12 fee at a good private school for 1 child

$40,000 = overseas travel budget. Would be enough for 2 x 3 adult business class fares and some good travel

$30,000 = clothes, utilities, dining out, general expenses

$40,000 = lease payment on a flash car

Comes out at $220K

 

[cimbom]

and must be within 30 kms of the cbd

What? This is actually pretty far in most of the world. Go to Europe and tell people you travel 50kms to work and they'll probably recommend you get admitted to psychiatric institution. We're one of the very few places in the world where you can drive for 100kms and still be in the same "city". I'm not sure how wanting to live within 30kms of your work is considered a luxury. When I lived at home, it was just under that distance for me and it took me an hour each way. Do that for the whole year and it comes to about 20 full days (i.e. of 24 hours - or 62 work days) that you spend travelling to/from work. Or, put another way, your entire annual leave for that year. No thanks.

 

[ok180]

What? This is actually pretty far in most of the world. Go to Europe and tell people you travel 50kms to work and they'll probably recommend you get admitted to psychiatric institution. We're one of the very few places in the world where you can drive for 100kms and still be in the same "city". I'm not sure how wanting to live within 30kms of your work is considered a luxury. When I lived at home, it was just under that distance for me and it took me an hour each way. Do that for the whole year and it comes to about 20 full days (i.e. of 24 hours - or 62 work days) that you spend travelling to/from work. Or, put another way, your entire annual leave for that year. No thanks.

So true, here we think nothing of travelling an hour each way to work or a night out. For people in Europe you only do that if you want to go on a holiday.

 

[ok180]

I agree $200K is a good number.....here is why

$80,000 = 8% interest only on a $ 1 Million mortgage - have a nice house in a desirable location

$30,000 = current year 12 fee at a good private school for 1 child

$40,000 = overseas travel budget. Would be enough for 2 x 3 adult business class fares and some good travel

$30,000 = clothes, utilities, dining out, general expenses

$40,000 = lease payment on a flash car

Comes out at $220K

I think people are generally assuming the house is paid off and the kids are independent when they talk about down shifting a relying on passive income.

So you could straight away deduct the mortgage payments and school fees. I would like to see some statistics that sending your child to a school that costs 30k is good value for money anyway. We have good friends who are teachers who have taught in a variety of schools and say that there are more problem children in the expensive schools than the cheaper ones.


$40k a year on a car lease, holy $hit!... You would be leasing a 200-300k car at that rate. Im a car enthusiast and wouldn't see the point in that but to each their own.

 

[o0o]

With all due respect this has been covered thousands of times in other posts...

But it goes along with everything else in this thread. This type of thread pops up on here 8-9 times a year and goes for 4-5 pages so people can discuss how much they need to retire. Some advocate the benefits of retiring younger vs older and how much they'd require to do it. How much is enough is a thread topic everyone here likes to discuss and frugal vs extravagant living is always part of that discussion.

We aren't saving our money for anything. This is how we live.It's second nature.

That's great, your heirs will be extremely pleased.

I agree $200K is a good number.....here is why

$80,000 = 8% interest only on a $ 1 Million mortgage - have a nice house in a desirable location

$30,000 = current year 12 fee at a good private school for 1 child

$40,000 = overseas travel budget. Would be enough for 2 x 3 adult business class fares and some good travel

$30,000 = clothes, utilities, dining out, general expenses

$40,000 = lease payment on a flash car

Comes out at $220K

This sounds more like a wish list for when you are at your peak earning ability. By the time you "retire" you should be mortgage free and without kids to worry about. Your clothes, travel budget and car lease payments are extremely over the top.

 

[sanj]

This sounds more like a wish list for when you are at your peak earning ability. By the time you "retire" you should be mortgage free and without kids to worry about. Your clothes, travel budget and car lease payments are extremely over the top.

This is my main sticking point. Why?

That would mean "retiring" at say 50, no thanks.