Could you achieve "financial freedom" without the use of debt?

[boomtown]

No one would suggest that people go into politics to get rich...it's not a meaningful comparison.

It's ok once you count retirement benefits. I am sure Julia Gillard and Kevin Rudd will be on like 200k plus for life indexed to inflation.

Take into consideration you are only PM for a few years and you realize the effective rate of pay is millions per year. The cost to purchase a 200k per annum lifetime annuity at 45 would be massive. I have no idea how much but maybe 3 million at a guess.

 

[china]

But you work for it. How do feel getting phone calls at 2 am to come into the hospital NOW because you are needed, working until 8 am, then starting your day shift?

I doubt that you would need to do that as a plastic/cosmetic surgeon. There are no emergency boob lifts needed at 2am in the morning. Or if you were a dermatologist. These are the guys that earn a lot. Policemen, firemen and ambos work at those hours but do not get the same pay. I think that most established doctors have pretty good lifestyles dependent on their specialty.

 

[china]

It's ok once you count retirement benefits. I am sure Julia Gillard and Kevin Rudd will be on like 200k plus for life indexed to inflation.

Take into consideration you are only PM for a few years and you realize the effective rate of pay is millions per year.

Thats correct, as a doctor, if you do not work, you do not get paid. There is no super for self employed. However, even if you are the PM for five minutes, you will be looked after for life.

 

[cimbom]

Let's not forget the massive amount of study that most doctors need to do before they reach six figures. My husband is studying medicine/science atm and he'll be into his 40s before he's qualified for his desired specialisation. Obviously he'll start getting paid before then but even so, it is a big opportunity cost. If you're smart with money, you can set yourself up quite comfortably by then in a less demanding field.

Not to mention that in Australia, specialist training spots are actually quite low in number. My husband said that one uni in Canada (he started studying there and moved to Aust and had to restart) produces as many specialists in some fields in one year as the whole of Australia. One of the specialisations he's interested in offers only ~10 training positions annually for the whole of Australia. Not the best odds that's for sure.

 

[boomtown]

Doctors who work night shifts like that don't earn the big bucks. They are locum doctors who are basically part-timers for the most part.

Not talking night shift talking on call roster. Sure non emergency surgeons and most pathologists don't have to do on call but a hell of a lot of other doctors do. And even if the registrar at the hospital can handle it you still need to talk to the, and make sure they are doing the right thing.

And it's a reasonably lucrative trade so many private practice doctors will also have admitting rights at public or private hospitals. And some lecture at Uni as well. So they are holding down at least three jobs.

Boob doctors yes they are a special category.

 

[boomtown]

Not to mention that in Australia, specialist training spots are actually quite low in number. My husband said that one uni in Canada (he started studying there and moved to Aust and had to restart) produces as many specialists in some fields in one year as the whole of Australia. One of the specialisations he's interested in offers only ~10 training positions annually for the whole of Australia. Not the best odds that's for sure.

Which is why so many of our doctors have to go overseas to train then come back here later. If we haven't lost them permanently.

 

[Aaron_C]

Let's not forget the massive amount of study that most doctors need to do before they reach six figures. My husband is studying medicine/science atm and he'll be into his 40s before he's qualified for his desired specialisation. Obviously he'll start getting paid before then but even so, it is a big opportunity cost. If you're smart with money, you can set yourself up quite comfortably by then in a less demanding field.

Not to mention that in Australia, specialist training spots are actually quite low in number. My husband said that one uni in Canada (he started studying there and moved to Aust and had to restart) produces as many specialists in some fields in one year as the whole of Australia. One of the specialisations he's interested in offers only ~10 training positions annually for the whole of Australia. Not the best odds that's for sure.

That is because the specialist colleges restrict the amount of specialists being admitted into practice. They do this via high failure rates, particularly for lucrative fields like opthalmology and dermatology. It may or may not be intentional in order to maintain the high fees charged by medical specialists due to control of the supply side.

 

[JIT]

I reckon it could be done on a high salary without debt, but it would take enormous discipline and a frugal lifestyle for many years to achieve.

If you have a medium income or a low income, forget it....life's normal expenses would prevent it.

I remember as a young fella, thinking that with a fully paid off roof over my head, then $ 100 a day would suffice. 36.5K pa after tax.

I was into shares back then, and figured that with a rough 5% yield, a $ 1,000 would yield $ 50 per year, or about $ 1 per week.

My goal was then easily broken down to getting $ 700 per week, and I knew I would need to have 700K in my pocket to get there. It seemed very achievable at the time.

Of course, that was before complications like wives, kids, school fees, upgraded houses, medical bills for women and children and everything else life throws at you.

The goal was completely blown out of the water, and new targets were set which made the task an order of magnitude more difficult.

To overcome that wall....debt is essential.

A good income and savings capacity with investments in passive franked share dividends is a simple and effective strategy, but I agree that to really build the capital base required needs leverage, and leveraged property is a good way to do this.

 

[china]

Let's not forget the massive amount of study that most doctors need to do before they reach six figures. My husband is studying medicine/science atm and he'll be into his 40s before he's qualified for his desired specialisation. Obviously he'll start getting paid before then but even so, it is a big opportunity cost. If you're smart with money, you can set yourself up quite comfortably by then in a less demanding field.

Not to mention that in Australia, specialist training spots are actually quite low in number. My husband said that one uni in Canada (he started studying there and moved to Aust and had to restart) produces as many specialists in some fields in one year as the whole of Australia. One of the specialisations he's interested in offers only ~10 training positions annually for the whole of Australia. Not the best odds that's for sure.

If he gets into one of 10 training positions, he will rapidly make up for the opportunity cost and more.. There are many people in Canada than there are in Australia and therefore, you would need more doctors.

 

[china]

Not talking night shift talking on call roster. Sure non emergency surgeons and most pathologists don't have to do on call but a hell of a lot of other doctors do. And even if the registrar at the hospital can handle it you still need to talk to the, and make sure they are doing the right thing.

And it's a reasonably lucrative trade so many private practice doctors will also have admitting rights at public or private hospitals. And some lecture at Uni as well. So they are holding down at least three jobs.

Boob doctors yes they are a special category.

It is the non-emergency surgeons that make the mega bucks. It is easy for them to hold a few hospital appointments because the private hospitals don't deal with emergencies and you can therefore control the work hours.

 

[cimbom]

If he gets into one of 10 training positions, he will rapidly make up for the opportunity cost and more.. There are many people in Canada than there are in Australia and therefore, you would need more doctors.

That is only one university in Canada (there are many more) and the population is not that much bigger - only about 8 million more I think.

The point of my post is that it is very hard work to get to that stage. Not simply a matter of graduating uni with a medical degree and turning up to work for a massive salary. There are a lot of obstacles along the way - exams to pass, having to join the right projects and get the right experience, training positions to be selected for, etc. It's a very long road and to be honest, a lot of people would probably go crazy if "financial freedom" was their only motivator.

 

[aussierogue]

What about flying business class to Europe? Driving a mercedes benz convertible? Launching your yacht from your own private jetty of your waterfront home? Do you not need to do these things before you depart this earthly life or at least allow your wife to do so? Otherwise, what is there to show for 62 years of work?

Dont wanna be too harsh but you sound just a little shallow and materialistic...

Your suggestion is that those who die without those things have somehow had less of a life than those who have....

The correct answer imo to the thread title is yes

How

1. Earn a high income
2. Save a sheissen load
3. Live frugally (not cheap but sensibly)

= financial freedom within 10 to 15 years..

 

[Melbournian]

with a name like "china" - that would be the what most ppl of that background aspire to do. And different societies/cultures have different values and aspirations although it's diff here in australia.

i just like to watch my NBA games while eating my french fries.

 

[china]

That is because the specialist colleges restrict the amount of specialists being admitted into practice. They do this via high failure rates, particularly for lucrative fields like opthalmology and dermatology. It may or may not be intentional in order to maintain the high fees charged by medical specialists due to control of the supply side.

Since we are talking about doctors on a property forum, I want to share a link which shows what a doctor's house looks like in Sydney.

http://www.dailytelegraph.com.au/ne...ansion-in-henley/story-e6freuy9-1226400873591

 

[Deltaberry]

Not sure why we're comparing PM with doctors...

 

[M.Investigator]

Dont wanna be too harsh but you sound just a little shallow and materialistic...

Your suggestion is that those who die without those things have somehow had less of a life than those who have....

The correct answer imo to the thread title is yes

How

1. Earn a high income
2. Save a sheissen load
3. Live frugally (not cheap but sensibly)

= financial freedom within 10 to 15 years..

I think a very quick way to reach financial freedom is to live humbly. If you do that, then the amount of cashflow that you need per month to live off will be rather low or moderate. (In fact, if you read "The Millionaire Next Door", the author foudn that many millionaires actually do live modestly, not the lavish Hollywood lifestyle that most peopel think about millionaires).

Thes, yes you'd need to work hard and save money, and then you could buy cheap positive cashflow properties outright (without debt) or purchase stocks that give you dividend income per month.

Or if you atake initiative, you could start your own business and gain financial freedom off that (without using any debt).

 

[Rolf Latham]

Thes, yes you'd need to work hard and save money, and then you could buy cheap positive cashflow properties outright (without debt) or purchase stocks that give you dividend income per month.

looking to replace an average family income and expenses, with an average family home.

No point looking at statistical outliers such the family that lives off 2 minute noodles, always shops at Vinnie's, or the opposite with those earning 250 k +pa.

Nil debt would take a while..........and a while longer

Im sure someone has a spreadsheet or a model somewhere.

ta
rolf

 

[Graemsay]

It's currently a wet afternoon, and I've got nothing better to do, so I decided to crank some numbers and see what came out.

I took a simplified set of assumptions:

• Inflation averages out at 3% over a thirty year stretch.
• Assets grew in value at 6% to 7% over that time.
• You started saving the $4250 per year, growing with inflation, which equates to around $10,000 per annum today.
• The savings are made using a tax-free scheme.

After thirty years your savings would be around $500,000.

The inflation-linked annuity rate in the UK is around 4% for a 65 year old male, which would give $20,000 per year (and rising) as an income. If you're not a retiree, then a 3% return would preserve your capital, so $15,000 per annum.

So as a rule of thumb, to be financially free without debt you'd need to save two thirds of your target income over a period of thirty years if you want to preserve the capital, or about half of your target income if not.

If you want to achieve financial freedom debt-free and using a low risk strategy then it's going to be a lifetime's work.