Reminds me of a country: GREECE
how can i make $400 a week from $100k cash?
- Thread starter james start
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Reminds me of a country: GREECE
bit of a long shot and may seem like a strange question, but if you had 100k in cash and needed to generate an income of 400 a week net how would you do it?,
I have been looking at businesses, but 100k doesn't buy you much except more work
if I can pull it off then I can retire, in fact if you can come up with a clever way to do it for 90k I might send you 10k as a thankyou
I don't see it happening. My immediate thought was to I vest in an existing/growing business but you'd have to ask yourself what you bring to the table, assuming you do t want to do any work.
20% plus returns are common in business nut are also riskier than resi investments and can be harder to identify. This is especially true if you're talking about investing in a % of a growing small business
I don't know enough about the cash bond strategy to comment on it in full but it doesn't make sense to me for your situation. You're looking for returns but that would mainly help with serviceability while actually providing a pretty poor return on your money
Thanks for all the inspiring ideas, I can see the end is in sight for me, lying in my back yard paddling pool, drinking vb cans living the dream on my 400 a week passive Income
Yeah I reckon this is the way to go, cash buys in the usofa, gonna check it out. Thanks
Where you say 20% plus, does that exclude the "time cost" of your ownself? If you are already earning 100k per year salary work, then to get that amount with a business that generate 20% return per annum, then you will need to invest 500k with associated risk. if its only 100k capital, getting a measley 20k pa out of what maybe full time work seems hardly worth it.
Its not a cash buy thought? Its leveraged if you care to read the whole article.
pinkboy
Sorry I should have been clearer. I was referring more to investing in a business not buying it outright. At around 100k you could maybe buy 20% of a business making say 200k a year that is growing but what do you bring to the table and what sort of involvement would you have etc.
There's a little bit more fat in a business like that which cab still run under management or under the main shareholder effectively managing it. There are lots of moving parts but these opportunities are out there.
To buy a 100k business outright that runs under management is a tougher thing to be hands off with as the margin for error is small and unless there are some obvious/easy fixes in the short term you may end up spending more time than you intend to. The returns can be pretty outstanding for those kinds of businesses though.
A friend bought a small business for 50k a few years ago that complimented his existing business and sold it for 200k 18-24 months later. Towards the last 6 months I think he was making an annualized profit in excess of the purchase price so 100% returns+ the 300% capital gain.
This can't be done hands off though which is why a smaller stake in a larger but still small business is the most obvious option for you. Just my opinion of course
Yeah I did, but I think that I would look for cheaper houses that yielded more and pay for them outright, we were looking at USA properties prior to this, many things to consider
Over 10 yrs ago now but a company called Lettvale Pty Ltd owns a chain of Adult stores, they were seeking silent partners $200k buy in to start up new stores. The established stores were getting some pretty decent returns.
I'm sure there are some more of these hidden opportunities available out there in similarly lucrative markets.
Personally It's not the type of business I'd go into but I guess it's all about supply and demand, or it could just be about the money!
I'm sure there are some more of these hidden opportunities available out there in similarly lucrative markets.
Personally It's not the type of business I'd go into but I guess it's all about supply and demand, or it could just be about the money!
Great for now, but what happens in the coming years when the cost of living doubles and your 100k bankroll becomes insignificant?
I have ips that are not part of the 100k in 3-6 years I hope there is enough growth for me to pay down a house and live off rent and go forward with a good business idea, I'm hoping for 5% a year increases but who knows
The reason for now is that I have free accommodation and that all I need is spending money so I can rid myself off this soul destroying job
Throughout my life I have had most people tell me that most things are not possible but what I have learned is that most things are you just need to go out and find them. This mindset from people also seems to be prevalent on here but every now and again a good idea comes through from someone that is a free thinker
I was looking for something that could provide me with a reliable income till I worked out what I was going to do next .
Correct it is simply a tool for creating income to increase serviceability and you can not retire on it as I mention. How one thinks it's subject to opportunity & inflation losses once commuted needs their education on structure addressed further.
Once again, your perceived knowledge of converting realised capital growth to cash flow for the purposes funding lifestyle can at best be described as appalling, even more so since it's being expressed from some one of your chosen vocation within the financial planning industry.
What I find even more irresponsible in my opinion is the so called Financial Planning Industry charging fees and/or trailing commissions in return for so called advice, when some so called Financial Planners are still having to work themselves for income to live.
The question that really needs asking is, if they are so good a Financial Planner in the first instance why are they still working for income to maintain a living for themselves.
From my past 20 years of experience and now having fully exited paid employment, here's my best tip for any newbies just setting out down the path to creating wealth and for that matter anyone else - I prefer to take advice & bounce ideas off someone who has already attained what I was also wanting to achieve for myself/family, than entertain the so called advice of some inept and/or incompetent advisor who does not have any real wealth of their own.
In other words, someone who?s walked the talk as opposed to someone who purely just talks the talk.
I hope this helps.
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Wasted on?
You know I used to work for the guy that introduced cashbonds to you, right?
Being a housewife doesn't count, sunshine.
Your supposed knowledge on the subject even after all that time ...Even more amazing isnt it. You must have forgot alot.
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Why not?
Is there something wrong with building wealth and completely replacing one's payg income with passive income generated from investments, who can take their kids to & from school, whilst their wife chooses to work part time?
We're in a very fortunate, self created position, to be able to do it.
I know of many others who wish they could do the same.
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This is correct. If you have a taxable income, let me give you a real world example - 1 bed villa in Orange 65M2 + courtyard + parking. 260K.
Let's say you contribute 10% (26K) + stamp duty (2,590 - you get a 5K discount on stamp duty in NSW for new stock under 650K) + a 5K cash buffer + legals, depreciation, building and pest (lets call that $2500)
Total contribution = $36,090.
You borrow the other 90% + LMI - which is @ $237,600 - you borrow at 4.69% fixed for 5 years in this particular scenario. ( ME Bank - who do 90% + LMI for NRAS)
Interest Costs for 12 months = $11,143.44
Body Corp = $1300 per annum
Rates = $1200 per annum
water = $400 per annum
landlord insurance = $300 per annum
Property management = $1071 per annum ( based on 9% + GST of NRAS rent of $208 per week)
Total expenses = $15414. Lets just call it $15,500 to be conservative
Market Rent $260 per week. NRAS = $208 rent per week
Total income = $10,816. Lets call it $10,500 to be conservative
Income = 10.5K. Expenses = 15.5K. Pre tax loss = $5,000 ( this is an allowable deduction)
Depreciation = $9,000 (this is also an allowable deduction)
Total allowable deduction = $14,000
If you are paying a MTR of 32.5% , your ATO refund is $4,550 + $10,661 NRAS , for a total return of $15,211 after tax. take 5K and replenish your buffer to cover the pre tax loss for Year 2, and your real net CF + result is @ 10,211 Your contribution was @ 36K, and your tax free return ( after all costs have been accounted for) is 10.2K. That's a touch over 28% return on 36K - tax free. Rinse, repeat x 10 years. $0 from your pocket, other than the initial 36K.
If you are paying a MTR rate of 37% , your ATO refund is $5180 + $10,661 NRAS. Total return of $15,841. $10,841 CF+ after setting 5K aside for Year 2 buffer. 30% tax free return on 36K Rinse, repeat x 10 years. $0 from your pocket, other than the initial 36K.
You only get the 5K stamp duty rebate on 1 property per financial year in NSW, so the 2nd purchase would cost you 41K instead of 36K. bUt the numbers would be pretty much the same. So for property 2, Rinse, repeat x 10 years. $0 from your pocket, other than the initial 41K.
That's one way to generate more than 20K tax free ( $400 per week give or take) from just 77K of your cash. Then, to improve it further, if you had done something like this and used 77K, left 23K alone, waited 1 year then added the 20K of CF+ tax free money to your 23K to fund the 10% deposit , stamp duty , buffer and legals for a 3rd NRAS property, you'd then be generating over 30K tax free per annum , indexed to rental CPI so increasing annually for 10 years - but with all your debt fixed at 4.69% for the first 5 years, so no shock factor to worry about. No smoke. No mirrors. The numbers are correct
Then, even if you sell after 10 years and just get your 260K + stamp duty + legals back.... in otherwords, even if you get next to $0 growth - which is very unlikely but lets humour the cynics- you've got all your 100K capital back, have not had the joy of paying CGT, yet you've still generated over 300K of tax free $$$ ( ie a 30% + return ) for 10 years.
Not sure where else you can take 100K and turn it into that sort of tax free money in any other form of asset ( non NRAS resi, commercial, or anything else you can think of) without extreme risk.
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