$58,325 is comfortable for who??

[baby blue eyes]

Brocky

There is a generous tax free threshold for self funded retirees at senior age. Above this you pay tax. However you are so far from retirement I am sure the goalposts will change on what is current tax law. In the last decade tax free thresholds and super rules have changed enormously along with family tax benefit help. There will definitely be further changes before you retire.

 

[Angel]

Brocky, what works for you will not work for me or anyone else, see the message I sent you yesterday. There is no way any of our IPs will be paid out soon, we only bought them a few years ago and none have increased in value yet. The PPOR is partly mortgaged to pay for part of the IPs, there is no increased equity at all after four years. We don't have any in Sydney and the media doesn't talk about anywhere else in Australia other than Sydney and Melbourne. Hence my depression, if things had gone as "planned", we would be ready to leave work in a couple more years with the PPOR debt-free.

You have to be prepared to amend your plans as the economy changes. Kids and marriages affect the plan too. Our goal five years ago was significantly different to the reality of how it has panned out. The best thing financially for us is probably to keep at our day jobs until the properties in South East Qld increase significantly. How will that affect our mental health though? Don't tell us to get another job, we are over 50 remember. Mark has applied for heaps of jobs with no success over the last five years.

 

[brocky05]

Brocky, what works for you will not work for me or anyone else, see the message I sent you yesterday. There is no way any of our IPs will be paid out soon, we only bought them a few years ago and none have increased in value yet. The PPOR is partly mortgaged to pay for part of the IPs, there is no increased equity at all after four years. We don't have any in Sydney and the media doesn't talk about anywhere else in Australia other than Sydney and Melbourne. Hence my depression, if things had gone as "planned", we would be ready to leave work in a couple more years with the PPOR debt-free.

You have to be prepared to amend your plans as the economy changes. Kids and marriages affect the plan too. Our goal five years ago was significantly different to the reality of how it has panned out. The best thing financially for us is probably to keep at our day jobs until the properties in South East Qld increase significantly. How will that affect our mental health though? Don't tell us to get another job, we are over 50 remember. Mark has applied for heaps of jobs with no success over the last five years.

I'm still learning feel your pain though my IP is in a dead area the real estate said after 5 yrs of me owning it to sell it today I would actually have to list it $60K less than what I bought it for + all the other associated costs of selling. Purely for this reason I wont sell it and wont loose 70K + why should I when anywhere else in Australia is skyrocketing. So I have decided to keep it long term and make it best work for me hopefully it will all pan out. Very stressful and annoying on its decline took me 4 years to wake up and pull myself out of a big depression hole. Its in Northern NSW on a 1 acre block which unfortunately cant be subdivided to keep the area rural look.... anyway im praying that one day maybe in 20 years time it will come good.

 

[MTR]

.

I just think it's a bit of a low aim to spend a life time investing trying to only generate $58k (which is only $25k pa over the age pension). Hopefully over a lifetime of investing most people will do much much better than $58k pa passive regadless of what they spend.

.....and that is why I started this thread.

So if you think it may take a life time to generate $58,000 cash flow, what will it take to generate $100K??? my guess is some may actually never achieve this

Some may already live happily on perhaps $58,000, review their asset base and tweak it so they buy time instead, and give away their day job, similar to what Homepage has accomplished.

Also, another consideration just because someone decides to retire at $58,000 I expect most of the long time investors may have the skills to continue producing/increasing income.

Most of the investors I know who no longer have a day job have continued to create wealth/generate income by either continuing to invest, starting businesses pertaining to property, developing, renovating etc.

If someone is passionate about property then they probably never give it up completely.

MTR

 

[tropic]

Hi Angel,

I hope you feel better each day.
Hopefully you also enjoy the journey as much as the destination in your IPs goals.
On the positive side it looks like IR won't go up anytime soon, your rental income might.

 

[Of The Vultures]

We will also have other forms of income (rents/business income), plus a couple of sideline businesses that dont require significant work/service mostly done online which will be used to further purchase more 'true passive income' whilst we live.

I'm curious - what kind of sideline online businesses are you involved in that don't require much work and yet manage to earn you something? I imagine that to succeed online you have to have your marketing down pat so you cut through all the noise and prospective buyers have more than a snowflake's chance in hell of finding you. How do you do that without 'much work"? Genuinely would love to know.

 

[Richard Feynman]

I'm curious - what kind of sideline online businesses are you involved in that don't require much work and yet manage to earn you something? I imagine that to succeed online you have to have your marketing down pat so you cut through all the noise and prospective buyers have more than a snowflake's chance in hell of finding you. How do you do that without 'much work"? Genuinely would love to know.

Until you hear form pinkboy...

You can automate many online business pretty much entirely, once they're set up.

You can drop ship goods which are stored at the same place that ships them (not you) and have orders form your site go directly to the shipping house to be fulfilled.

Or you can sell digital products (which require no shipping or storage and can be downloaded instantly by purchasers)

And the other element, once your website is optimised for search engines and you've you've tested, tweaked and optimised your advertising/marketing, you simply set a weekly budget and let your ads run and bring traffic (and orders) automatically.

Set and forget.

 

[Biz]

Until you hear form pinkboy...

You can automate many online business pretty much entirely, once they're set up.

You can drop ship goods which are stored at the same place that ships them (not you) and have orders form your site go directly to the shipping house to be fulfilled.

Or you can sell digital products (which require no shipping or storage and can be downloaded instantly by purchasers)

And the other element, once your website is optimised for search engines and you've you've tested, tweaked and optimised your advertising/marketing, you simply set a weekly budget and let your ads run and bring traffic (and orders) automatically.

Set and forget.

Lol no.

Margins online are generally small. 3pl adds another layer of cost and you are basically palming off your customer service to someone who doesn't care.

Digital products can have good margin but there is little profit in it unless you are talking software but that is hardly a set and forget business.

Finally online marketing is constantly evolving. The tricks that worked well a couple of years ago dont work as well now and will be dead in a couple more.

People who think online business is passive have no idea of the work and thought that goes into it to succeed long term.

 

[pinkboy]

I'm curious - what kind of sideline online businesses are you involved in that don't require much work and yet manage to earn you something? I imagine that to succeed online you have to have your marketing down pat so you cut through all the noise and prospective buyers have more than a snowflake's chance in hell of finding you. How do you do that without 'much work"? Genuinely would love to know.

Until you hear form pinkboy...


Or you can sell digital products (which require no shipping or storage and can be downloaded instantly by purchasers)

^^ This ^^.

My current thoughts are on some generic training plans, moving to more custom type stuff for more earnings. Also moving to possibly supplying nutrition products etc for athletes. Not 100% sure yet.

I also believe I have found a little niche which I am putting together currently (regarding above) which I cant currently find anyone doing.

Also, Im not looking to make $squillions. Im moving to a more simplistic lifestyle than my current one and only doing something that I truely love and believe in. My current business already turns over $millions, but one cant say I 'love' what we do - its just not conducive to any 'lifestyle choice'.

pinkboy

 

[The Fence]

I also believe I have found a little niche which I am putting together currently (regarding above) which I cant currently find anyone doing.

Interesting, what is it?

 

[pinkboy]

Interesting, what is it?

pinkboy

 

[The Fence]

Ok, but just give me a few minutes eh...?

 

[jingo]

MTR,

Another thought provoking thread which I've been pondering for a number of days now - thanks. Its been a great read so far.

My own thoughts - I think the amount required to live on varies greatly between person to person and stage of life also plays a large part in determining spending.

For my own family, which consists of myself, my wife and our 10 (soon to be 11) year old daughter, we would currently spend between $58,000-$65,000 each year. This doesn't include mortgage or investment property payments as our investment income covers all of these including property outgoings and expenses.

We pay private school fees (these are subsidized by 50% as I am staff and my daughter receives a discount) and fork out money each week for her music, Karate, Swimming and tennis lessons. We have private health insurance and would easily spend $5000 - $10,000 each year on a holiday.

Personally, I think our family would need a passive income of $100,000 p/a to be comfortable. We could achieve this now by selling down our property portfolio and investing in shares, but will probably continue working and investing in shares along the way.

 

[HomePage]

Just finished analysing my expenses for 2014.

Core living expenses (amenities, groceries, transport, accommodation overheads, pets, medical and dental) for a household of four adults came in at $23K (net of $8K housekeeping contributions from our two adult children still living with us). Discretionary spending (alcohol, entertainment, dining out, clothing, miscellaneous, gifts, phone and computer upgrades) for the wife and I was another $9K. Holidays were $8K and included going OS, a long weekender in Melbourne and a long road trip to the red centre. Finally, we had solar power installed for $7K, which is a bit extravagant but should pay itself back with electricity consumption savings over the next 7-10 years.

So all up we spent $47K, more than half of which was for wants, not needs. As I've said before in this thread, $58K is a luxurous amount of income for our lifestyle.

Some may criticise me for taking household contributions from my kids, but they're both adults, earning good income through employment and are comparable consumers of household services. I've always believed in taking responsibility for your own life and paying ones way when you should. I cringe when I hear of kids still sponging off their parents well after they enter their 20's and their parents being in a poorer financial position as a result. The old saying 'catch a man a fish, you feed him for a day; teach a man to fish, he feeds himself for life' comes to mind with this. Case in point, my eldest (23) moves into his own unit next month, with 40% equity down and a goal to pay it off within 5 years.

 

[js1]

$150,000 is the sweet spot for me.

 

[MTR]

MTR,

Personally, I think our family would need a passive income of $100,000 p/a to be comfortable. We could achieve this now by selling down our property portfolio and investing in shares, but will probably continue working and investing in shares along the way.

Hi Jingo

So you would rather continue working for xx years rather than sell down and retire on an income that will provide you today with a great lifestyle??

Another consideration if you sell now are you selling in a rising market?

If you decide not to sell but change your mind what if the market is flat it may be harder to sell, just throwing it out there.

I assume your properties are all in Melb, maybe its a good time to take the money and run if you get where I am coming from.

Also, you can always retire today but continue investing is that an option??

 

[Blacky]

Also, you can always retire today but continue investing is that an option??

That is certainly my plan. Once I have enough to live off, and show some level of servicing I intend to take an extended vacation.
Then come back and continue to invest and maybe start a business of some sort - or at least find some way of creating 'play' money.

I don't want an extravagant lifestyle, I value my time too much. I have spent nearly 1/3 of my life working 60-100hrs/week.
Even now, though I only work 6 months a year, I average ~45hrs/week over a 'normal' working year (its just that I compress it into fewer working days).
Another couple of years and Ill be done with it.

Well, thats the goal.

Blacky

 

[sanj]

Yeah I find it interesting a lot of people assume retirement or a form of it involves stopping investing.

I personally think a regular job often gets in the way of making money as you have to turn down opportunities due to lack of time and focus

 

[jingo]

Hi Jingo

So you would rather continue working for xx years rather than sell down and retire on an income that will provide you today with a great lifestyle??

Another consideration if you sell now are you selling in a rising market?

If you decide not to sell but change your mind what if the market is flat it may be harder to sell, just throwing it out there.

I assume your properties are all in Melb, maybe its a good time to take the money and run if you get where I am coming from.

Also, you can always retire today but continue investing is that an option??

Hi MTR,

As you have probably gathered, I'm not a hasty type of person! I do a lot of thinking before I take action - possibly too much at times!

My current thoughts are to ensure that we would really have enough to sustain us for the rest of our lives. Our daughter is still young, so there will be many more schooling costs etc to consider.

Regarding the portfolio, there will be substantial CGT to pay upon selling. Once its sold down, there is no getting it back (in its current form at least) so to speak, so its not something I will do hastily!

I will continue to invest in shares. If my health deteriorates or circumstances change, then yes, we'd sell down etc.

Its much easier going to work knowing that you have a plan B and you don't really have to be there if it all gets too hard!!

Interestingly, our former Principal who retired 4 years ago is now back at work - working in industry. He has an economics degree. I know he wouldn't need to work, but chooses to. I'm sure there are people around who enjoy the structure of work and miss it once its gone!

Hope you've had a great Christmas,

Regards Jason.

 

[Mr. Fabulous]

I don't want an extravagant lifestyle, I value my time too much.

This is me. I don't understand people who stay in boring, mind numbing jobs just to try and achieve the '100K per annum passive income' goal.

Currently in the process of moving to a country where I can live extremely comfortably on 15K Aussie dollars a year. That's roughly the equivalent of one job a month for me (or ten hours' work). I know it's not for everyone, but as you said Blacky - I value my time too much. Because it is the one thing that you can never get back.