Hands up for those nearing Financial Freedom

[robboat]

I think the time when your passive income exceeds your working income is significant.

Made this with a combination of property, cash and shares from the time I left school...lots, lots of work in the beginning!

It was significant for me as I found that I was loosing good reasons to go to a "job".
Now, I go to work because it is something I enjoy and work when & where I want.
Having time to help family & friends with their projects is also rewarding.

I have a plan for my wife and kids to ensure they are financially free in life as well.

To an extent it has been rinse and repeat what has worked...but there has been some real exploration of "do we really need this"....plus learning new things and education.....made for an easier and more enjoyable life.

I have been doing development work overseas in Africa and SE Asia that has opened up new investment opportunities....so I go there as well.
Much better growth but higher risk.

And - I like not having to worry about where the next dollar is coming from......

 

[Ace in the Hole]

I think the time when your passive income exceeds your working income is significant.

Our problem with this is the more we earn, the more debt we get into.
While we are on good incomes I want to accumulate our asset base and have continually been stretched over the years, so we have virtually no passive income at all approaching close to 10mil debt.
Sometimes I wonder why I put myself in this position, lucky my wife lets me do this.

I think net income is the only significant figure required vs the lifestyle you with to sustain.
Looking to cash out in 12 months to experience a comfortable lifestyle and have a real holiday for once, a very long holiday.

 

[alicudi]

Hi

It was my ambition to earn a good income off investment properties by owning them 100% debt free by the age of 40. I turn 40 next month and have achieved that financial goal.

I also planned to retire at the age of 40 and just relax and travel around the world but something in my head told me to go and start a uni course so I am currently doing the Bachelor of Property and Real Estate which is one of the few courses offered at a uni that allows one to become a registered valuer but my motivation for choosing to study this course was more the course content and not for future employment as an employee but I might consider running a valuation business in the future.

However what I failed to include in my financial goal is owning my own home outright and in fact I need to now purchase my home which will only be a cheapie for now so as to not lose any quality of life and the ability to make other choices such as adding further investments to my portfolio which I very well intend to do.

So once I have a small cheap property to live in with a relatively small mortgage that I intend to pay off comfortably within a 5 to 7 year period I will then be truly financially free as I don't class having to rent a ppor as been financially free.

Regards,

alicudi

 

[MTR]

I wouldn't read too much into it Joe. Your mixing up my connotation with your denotation. By writing "not minding what I do" I actually mean that I enjoy it. I wrote in another thread that I think I have the best lifestyle of anyone I know personally. And I get to schmooze with some very high income earners (in the millions)..... I may even die of having fun.

Back on topic, Dazz puts it well again. The more you make, the harder it is to pull the plug, as the greater is the loss (financially) from leaving active work as an employee.

It's a very personal thing of course, and I enjoy the insight on this from the posters in this thread including yours and hope there are some more.

I get it Oscar. What do you do for a living? My golly goodness, I don't know anyone who earns this type of money in their day job, 7 figures, hard to part with that one am sure.

I gave up the day job some 8 years ago now and it was not easy as it was my security blanket, I ended up taking 1 year off work unpaid leave and never went back. Don't want to see anyone I once worked with just because its another world and I don't fit and bad memories, getting up at 7.00 am

For me its like I needed to reinvent myself when I gave up the day job and find other interests besides property. Its been the best thing I ever did and also pushed me outside my comfort zone. Still never give up the property thing, but mix it with other stuff that makes me happy. All the best which ever way you go.

Cheers
MTR

 

[INVSTOR]

I basically haven't worked for 15 years apart from a 6month stint of working 9 hours a week. Including travel hubby is working 11hour days Mon-Fri and every Saturday for about 8 hours. He doesn't have a choice for overtime. It's really getting to me now and motivating me to plan for retirement. Next year I'll get the ball rolling, sell a couple of properties and start developing another. I Really need to do some spreadsheet planning. Possibly 5 years off hubby retiring but I guess it all depends which way kids go also with Uni fees.

 

[travelbug]

Ive got a hip replacement to look forward to later in the year. Not sure if Hubby will work from home, take unpaid leave or just quit. I'm liking the idea of unpaid leave, because then he's still got his pay packet to go back to when he wants more loans.

A friend of my dad's had a hip replacement and was at the club the next day.
I tried explaining to my dad that that wouldn't happen but he wouldn't be swayed (He saw the scar!!)

Hope yours goes that well.
My hubby LOVES his new knee. He keeps telling everyone he can outwalk me now.The doctor was so impressed he said "see you in 10 years".

I'm loving my 3 days a week. I think I'll do that for a few more years. We have ramped up our travelling this year so the money is handy for that. If I wasn't addicted to travel I could quit. But then what fun would that be?

 

[Oscar]

I get it Oscar. What do you do for a living? My golly goodness, I don't know anyone who earns this type of money in their day job, 7 figures, hard to part with that one am sure.
MTR

HI MTR - not quite there yet. I'll know in a few months if I get the gig. A down side of working in a large American multi national is that the higher you go, the bigger the target you become yourself. For me to get this next level role with a 7 figure remuneration potential (potential because half the income depends on my personal performance), will require others to possibly become redundant. If I don't get this role, I may become redundant myself. The higher you climb, the greater the rewards, but the risks multiply as well. No such thing as a free lunch!

This early retirement thing *could* be quite automatic

 

[skater]

A friend of my dad's had a hip replacement and was at the club the next day.

From what my specialist has said this is near impossible. There's another SS member having one done around the same time too. Pity we'll be in different hospitals.

I'm loving my 3 days a week. I think I'll do that for a few more years. We have ramped up our travelling this year so the money is handy for that. If I wasn't addicted to travel I could quit. But then what fun would that be?

I wonder if that could be an option for Hubby. Work just gets in the way of things that he wants to do these days.

 

[Richard Feynman]

It's been good reading.

Great thread, and discussion.

Financially, I'm a way off yet. I've set a very reasonable baseline "financial freedom" goal but am shooting much, much higher. When I breach that minimum threshold, I'll gain the option of living entirely as I wish.

The greater my earnings and net worth, the loftier my aim becomes.

I look forward to popping back in and reading more.

 

[stumpie]

hi Folks

I'd like some advice and comments from more experience investors. Here's my high level strategy for executing the cash flow phase.

I've more or less achieved the asset acquisition target and projected out 4 or 5 years from now to have 50% LVR. If I hold all properties the rental income is not enough to live on or replace my income from employment. there are proponents out there which employ a LOR and LOE strategy, whilst this sounds great I'm wary of being at the disposal of the banks to approve further LOCs say in 5 years time. Rixter proposes using cash bonds to satisfy the banking criteria so they'll release equity i.e. capital income but i'd like to explore other options and hoping you smart folks have a solution.

So for me to hedge my bets i was playing around with a situation of:

1. having 4 unencumbered properties returning $x per week by selling down half of my properties to pay down debt
2. 2 encumbered properties with LVRs of 50% with a neutral CF position to retain a certain level of asset base in conjunction with 1 above so it grows in capital and protects against inflation.
3. $x in high yielding shares returning 5 or 5.5% pa
4. $x in term deposits returning 3.75% pa

when the time comes before i pull the pin, i'd refinance and hold cash buffers in LOCs, interest expense to come out of an LOC account, rental income to go into a separate account which we can live off. i learnt this approach from Terry W this is effectively a form of LOE where all rental property expenses comes out of an LOC but the income is for lifestyle expenses.

Have any one been successful in releasing equity in the form of capital income to their LOC post retirement from employment?

Wondering if any one can comment of a better solution?

 

[BayView]

It's a very difficult choice isn't it Oscar.

If you are on a high 5 figure income....it's like selling for free a very high yielding 6 figure property.

If you are on a low 6 figure income....it's like selling for free a very high yielding 7 figure property.

If you are lucky enough to be on a low 7 figure income....it's like selling for free a very high yielding 8 figure property.

....not easy to do when the crunch comes...

aaah! First world probs.

I'm on the verge of a promotion which will provide potential for a 7 figure income.

That's 1,000,000 - am I right?

Time to give this place a miss, and never worry about a damn thing ever again - unless you get really sick.

 

[Dazz]

aaah! First world probs.

If you think so.

I reckon it would be an agonising decision for Oscar if he managed to pull off the 7 figure salary.

To give it up, would be like having a fully paid for $ 12,000,000 fantastic property and simply throwing it away for free.

There wouldn't be too many on the forum who would be prepared to throw all of that away for free.

The vast majority on here wouldn't have a 12m portfolio so couldn't comment and wouldn't know.

An even smaller number would have it fully paid.

An even smaller amount again would then be willing to throw it all away for free.

On reflection, giving away a job like that is very rarified air indeed.

 

[jackbak]

To give it up, would be like having a fully paid for $ 12,000,000 fantastic property and simply throwing it away for free.

Not really. Property doesn't take up 50-90 hours a week. A job earning that income would. Plus a lot of stress I would imagine.

 

[onetwothreefour]

We are not even near to financial freedom. With 2 special need children, we don't have that kind of options. We can't even move city because there are not many schools that would be suitable for them. My daily routines are dictated by therapies appt.

And last week, my sister in law took me out for a coffee so she could discuss my future career with her!!!

Before I had kids, I was on 6 digits salary.

And Tony Abbott is changing all the support system....

 

[china]

Not really. Property doesn't take up 50-90 hours a week. A job earning that income would. Plus a lot of stress I would imagine.

Very true, I want those 65 hours a week back and to ditch the stress. Time is irreplaceable unlike money and income.

But unfortunately, I am 2 mil away from financial freedom and hence have to keep plugging along.

 

[Rolf Latham]

But unfortunately, I am 2 mil away from financial freedom and hence have to keep plugging along.

there are only 2 things you "have to do" in Australia.

One is to pay taxes

the other is that one day we will all die

Within reason, for most of us the "have tos" are self manufactured good or bad things

ta
rolf

 

[Dazz]

Not really. Property doesn't take up 50-90 hours a week.

Not really ?? Methinks you have no idea what you are talking about.

So enlighten us jackbak.....speaking from experience, how many hours does it take to own and manage a 12m portfolio ??

 

[D.T.]

Very true, I want those 65 hours a week back and to ditch the stress. Time is irreplaceable unlike money and income.

But unfortunately, I am 2 mil away from financial freedom and hence have to keep plugging along.

Keep saving buddy

 

[superAndrew]

So enlighten us jackbak.....speaking from experience, how many hours does it take to own and manage a 12m portfolio ??

Why would you have to manage them yourself?

Andrew

 

[BayView]

To give it up, would be like having a fully paid for $ 12,000,000 fantastic property and simply throwing it away for free.

I was taking about giving the Forum away - he doesn't need it to make any money - the high 6 - to 7 - figures is doing that quite nicely.

I wouldn't be giving 7 figures away in a hurry...or high 6's.

Unless of course the property portfolio can replace it - or to a level that will sustain the lifestyle one has become accustomed to.

Quote:
Originally Posted by Dazz View Post
So enlighten us jackbak.....speaking from experience, how many hours does it take to own and manage a 12m portfolio ??

When we had the 5 IP's, the time to manage them each week was probably about 15 mins on average in hindsight - the odd email to the PM (if they had emailed me about a repair etc), and to process the various paperwork items on the spreadsheets for the accountant.

But that's piddly little resi IP's....I imagine a large Comm or Shopping centre would be more involved.