How close are you to your goals?

In one way or another we all seemed to have goals whether it is amount of properties, amount of positive cash flow income or something else.

I set myself a few modest goal a few years back of either attaining a certain amount of properties or positive cash flow income. Some other goals I set was that the quest to these would not stop me from still doing the things I like, for example, travelling, cars and not having to work for someone else unless it was something I could enjoy and relax doing. I understood that it would mean attaining either of these goals would be slower than if I just concentrated on property investing and gave up the travelling and cars.

Recently while evaluating my goals I was happy to see I was in front on the passive income side but behind on the property side. Now I'm considering whether to try for the property side of things as well or just say enough is enough.

The passive income I now have has exceeded my goals and should continue to grow at a nice rate and was achieved with less properties than I thought was needed initially. My LVR is low. When going over my figures I realized if I sell one high end property I can remove my debt completely. Selling a high end property will also reduce my passive income but still be more than my original goal. Another option is to sell 2 lower end properties and still be in the same situation of debt free and still above my passive income goals.

If I remove all IP debt and that is the only type of debt I have as all other things are paid for by cash including my cars it may take approximately 2-3 years for rents to rise and have me back to my current IP income.

I'm not sure why but recently the feeling of being totally debt free is growing stronger although it requires selling something.

Finally the difference between removing the debt completely and having less income coming in is still more than the current PI received. I could continue to ride the property cycle longer decreasing my LVR, receiving more income to put towards either debt reduction or enjoying life but as mentioned before being debt free even though good debt looks very inviting.

Either way my current lifestyle can continue.

Any thoughts?
 
I've found that since starting on the track of investing 5 and a half years ago, I've achieved waaay more than I thought I would. I'm currently 1 IP away from my property target (which should be bought within the next year). Of course, I'm still planning on working full time for another 11 years or so, and contributing regularly to my shares protfolio, and I am about 2 years from having my PPOR paid off completely. This means I'll have 9-10 years of simply saving and paying down IP debt - which should be fairly easy.
 
I'm not sure why but recently the feeling of being totally debt free is growing stronger although it requires selling something.

Any thoughts?


Hi Y33,


We regularly cross that "thought bridge" about every 3 years, and have for the past 9 years now.


The first time was when we were in a position to sell one of the large assets and be in a position of paying off the NTDD whilst living in an average PPoR and having enough left over to passively support yourself at a basic level. Very tempting to do, tell the Bank to go jump and get them off your back. We resisted and did nothing, and looking back, glad we did.


The second time was when we were in a much better upgraded PPoR in a top flight suburb, but the rest of the story was the same. Once again, we did nothing. Glad we did.


The last time was a few years ago when a relatively major event occurred cashflow-wise, derived from one of the assets that we were thinking of getting rid of....and we were in a fortunate position of not needing my job anymore. Banks start making unfriendly noises due to X-coll entanglement and credit squirrels panicking, and a very tempting option is just to pay them out from asset sales, and keep the rest. Once again very tempting, but the CGT monster was too big to tackle. Eat humble pie for a while, appease the credit squirrels and chip away at the Bank was the tactic employed, to reasonable success.


That feeling Y33 may come again soon, probably during our next review mid 2011, when once again they will put the screws on us. LVRs under 50% mean nothing to the Banks nowadays. They want to see 20's or 30's which is way too conservative for my way of thinking.


I fundamentally cannot get around the fact of the dreadful position tax-wise of having a bunch of income flowing in and no major expenses. Writing out fat cheques to the ATO every month isn't why I have played this game so long and so hard.


I think I'll employ the same tactic used by most large successful investors when contemplating quandries like this.....sit and do nothing....until it blows over.


The other thing to mention is the 'resetting of goals'. Once you achieve your main goal, a vacuum appears and if you don't fill the void with something, then goal orientated people become quite lost. I don't know anyone focussed and goal orientated who screamed up to their goal, achieved it, then spent the next 50 years lying on a beach doing nothing. If you're that way inclined to take advantage of that lifestyle, I reckon you won't have it in you to get there in the first place.


Resetting a meaningful goal can be quite daunting once the major one has been achieved. Get up and read the newspaper - check...now what ??
 
I think I'll employ the same tactic used by most large successful investors when contemplating quandries like this.....sit and do nothing....until it blows over.

or buy another IP, get some more debt!

I thought about selling IP3 to pay off IP1 & 2. Instead, I bought another IP and have had 10 - 20% growth across all IP's in the past 12 months
 
I am far away from my goals, because I am ever re aligning....

Whilst have made some good results, feel my best years lay ahead of me, whilst being inline with initial goals they all get magnified x 10. So problem is never reach them, however do get forfillment along the way via different acheivements.
 
I'm a dismal failure.

Had planned on owning the world by aged 30....

Maybe 35.

I'll keep going though. Will get there eventually.

Seriously though, we haven't really got a goal, other than the dream of having oodles of money and never having to do any type of work at all, ever.
 
In a galaxy far far away...

I am in a galaxy far far away from my goals. Set myself an outrageous goal of acquiring another three properties by 2015. Currently with one PPOR and one IP, so next PPOR in 2011 and two 2BR IPs in 2013-2015.

Still in the asset accumulation phase, so the ultra long-term goal of living off cashflow is far far away. :eek:

Regards

Daniel Lee
 
I'm not sure why but recently the feeling of being totally debt free is growing stronger although it requires selling something.

We found that as we approach our "financial freedom" point, we are getting more "risk averse" (perhaps "leverage averse"?) as well.

I think the psychology behind it is - ok let's just get there, set the milestone, and then we can pretty much risk everything else beyond, because we have that "safety net".

Cheers,

The Y-man
 
We'd set a 5 year goal in about 2004, and were pretty happy with the result in 2009, probably owed about $100K more than we'd hoped, but the house cost us a bit more to build than we'd planned (that never happens, I know...) so we weren't too worried by that.

Have just bummed around a bit for the last 12 months still formulating the next plan in my head, will perhaps know a bit more about it by Christmas and we'll make it a 2011-2016 goal.

It might include a place in Margaret River and perhaps a small aeroplane, but like I said we're not sure yet...
 
Thanks all.

V8, I bet feels good to know you are in front and nearly there.

Daz, I still have other goals that go hand in hand with financial goals and were set inline with being able to spend most of my time with the kids when they arrive. Just over 2 yrs ago the first came along and it was bye bye work and hello play time. Now the second is due in a couple of months and the better half will probably not return to work either. Might be a bit hard for the better half to return to work especially as my plan is to buy a camper and set off around Japan for about a yr and then OZ for 2-3 yrs. When the oldest is ready for school then we will decide where to live although home schooling wouldn't be a bad option and allow us to keep travelling.

Will, had a look recently at getting further in to debt with another IP but the debt free feeling cancelled that idea.

Nathan, age might also be a factor as you are a lot younger. Not sure if you have family or not and my goals were set so I could be in the position to spend most of my time with the family.

Cloudyday, I guess that makes me different as I'm not looking for more or better but are happy with what I have.

Craig, I definitely had a few things pop up which had me thinking why go through all of this but now I can look back and think I'm glad I stuck to it.

Bayview, just because your not there doesn't mean you are a failure.

Daniellee, slow and steady will still get you there. May not be as quick as some but still quicker than others.

Y-man, might be spot on there. I can always decide to buy more later if I feel like it. Stopping now doesn't necessarily mean stopping altogether but it would have to be a good bargain or exceptionally property.

Perth, sounds similar although I started a few years earlier. My choice would be either helicopter or cruising yacht over a plane.

More info: The main aim was always to be financial secure before kids came along. This has meant having a children at a slightly older age than most. Probably could have started 5 years earlier than we did but then I wouldn't have been able to spend 99% of my time watching my daughter grow up.
 
Thanks all.

Perth, sounds similar although I started a few years earlier. My choice would be either helicopter or cruising yacht over a plane.

Maybe my aspirations aren't high enough, but a Plane is cheaper :)

Chopper would be a bit more flexible, but would probably preclude flying around Australia (my idea of caravanning; fly around with a motorbike and sidecar in the boot!)
 
Y33, I'm curious about how old you are, if you are happy to share?

Hubby is about to decide whether or not to give his job away, and having IPs has given us the freedom to choose. We don't have a lot of IPs but he will be returning to work after nearly a year off with the knowledge that if nothing has improved, he can resign. He is 51.

His job has been great until about two years ago. He used to come home some days at 2pm and we'd see a movie, or he'd take the kids to the park. He had a lot more freedom than many other fathers. If work was busy he would put in more hours, so it was not a free ride, but he enjoyed it.

The past year or so though, things had changed to drastically, that he no longer was enjoying it, so he has taken his LSL and now he will decide whether or not to get back into the rat race..... or not.

We have everything we want, a fairly secure future and we don't wish we had something else, so working to get more IPs or more money is just not that appealing. It is a nice feeling.
 
i still have a goal to buy one property every year for the next 10 years.

however, i liek the idea of paying my house off in the next five, so i've sidelined that goal and turned to cash generation strategies - which are proving VERY lucrative, much better than property returns for the same time period.

when the house is paid off, i'll be doing the Dazz trick - that is, walk into the bank with a title in hand and slap it on the desk asking for a 50% margin loan against it for a nice big rusty shed on an acre of land.....and so on and so forth.

continue the cash generation strategy on the side and pay down the other 50% margin in the next five years.

then take 2 titles to the bank and ask for another 50% margin loan.

etc etc etc

neg gearing is dead.
 
I am 32. I am pretty happy where I am in terms of properties as I have no desire to be filthy rich! Just want to set up a secure future as dont trust goverments in the future re superanuation. Like to have my own options.

Plan on maybe one more, which will be 4 altogether.

Doing some renovations in spare time on PPOR and learning some skills of carpentry which is new to me!

Next part of life plan is to gain some more nursing skills and go OS to do medicens sans frontiers. Just started working in ED this year so that goal is underway.
 
Plan on maybe one more, which will be 4 altogether.
Hi batgirl.

Why limit yourself to four (still a great achievement).

32 is still young enough to to be aiming a lot higher IMHO.

Four IP's, even if owned outright would give a nice return, but, without wanting to start another 'how much is enough' thread, is it enough.

All the best with whatever you choose.

Regards
Marty
 
Perth, Don't plan on the caravan route but a nice size 4WD camper similar to a dyna or international truck style or may go the other route with a lifted 4WD coaster or isuzu van.

Wylie, younger than your hubby will hit the book em Dano next year for those old enough to follow.

Blue card, nice plan and what type of acreage?

Batgirl, 3 by 32 and then 1 more is okay and depending on the income may leave you a bit short of a comfortable lifestyle without being described as filthy rich. Nursing a good profession that can be used to open other doors or earn an excellent income in specialized areas away from the hospital system.
 
i still have a goal to buy one property every year for the next 10 years.

however, i liek the idea of paying my house off in the next five, so i've sidelined that goal and turned to cash generation strategies - which are proving VERY lucrative, much better than property returns for the same time period.

when the house is paid off, i'll be doing the Dazz trick - that is, walk into the bank with a title in hand and slap it on the desk asking for a 50% margin loan against it for a nice big rusty shed on an acre of land.....and so on and so forth.

continue the cash generation strategy on the side and pay down the other 50% margin in the next five years.

then take 2 titles to the bank and ask for another 50% margin loan.

etc etc etc

neg gearing is dead.

Hi Aaron, can you give me some tips on "cash generation strategies"? Three and a half years into my investment accumulation phase (just bought my 3rd ip) and I am finding it hard to continue much more from a cashflow point of view and need to start investing and immediate high yield returns strategies for a while.

I agree negative gearing is not something I want to pursue any longer...any tips would be appreciated. Pm me if you wish.

Regards
 
Hi batgirl.

Why limit yourself to four (still a great achievement).

32 is still young enough to to be aiming a lot higher IMHO.

Four IP's, even if owned outright would give a nice return, but, without wanting to start another 'how much is enough' thread, is it enough.

All the best with whatever you choose.

Regards
Marty

My calculations show you need approx 8 as a minimum. Should aim @buying 10. Selling the ones that have had the highest CG to pay down outstanding debt and begin consolidating. Time period: 15 - 20 years
 
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