Reminders to keep my PI plan focused

Every now and again, the world gives me a little jolt to keep me on the right investment path.

This is the latest one I recieved.

A couple of months ago I had a Thursday off work. I had a few things to do at one of the biggest shopping centres in town and got there about 9.30 am thinking I was reasonably early and should be able to get a good car park.

Well, I drove around and around and had to end up parking out on the street. I went inside and the place was packed, people everywhere. "whats going on"? I thought. Is it school holidays...nope. A opening of a popular outlet.... nope. Some sort of long weekend or celebration coming up .... nope.:confused:

What is going on? Then I noticed 2 things.
1. Most of the people walking around were of retirement age probably 70%.
2. There was a huge line up for the teller at EVERY bank and building society in the centre, snaking through the bank premises and out on to the footpath.

Then it dawned on me... it was pension day.

I thought to myself..Why would elderly people some of whom had mobility issues want to come out into this mad rush and line up for ages at the bank, supermarket etc? It was as busy as the week before Christmas. Why not wait till the next day or the following Monday?

I remembered an elderly neighbour of mine at a previous PPOR that had to scrape by (food wise) the day before pension day and used to be up and dressed to go shopping really early that day.

I had to conclude that most of the throng at the shopping centre was in a similar pedicament to varying degrees.


This was another reminder to myself that I need to keep plugging away at my PI plan to make sure I dont have to join the crowds on pension day.

Sometimes when I have a little setback in my plan I think "if I sold all my investments, I could own my PPOR outright and have a bit left over and could give up work. I'd have nothing else but my super at retirement but no pressure now".

Its little reminders like this that remind me to keep focused.

I'd have to say my biggest fear in life (and has been since I was a child) is to end up poor and ill especially when I am old. I cant stop growing old, I cant control being ill bar looking after myself but I can control being poor or not.
:)
 
Good post. Kudos to you.
You could try another angle for your focus, if you subscribe to the "what you focus on expands" theory...
Focus on a life of abundance and health and forget about fearing poverty and ill health.
 
Totally agree with Rob.
Focus on the positive, not the negative.
The end goal will remain the same, but the journey will be so much more enjoyable.:)
I'm sure I read that somewhere:D
 
Thanks.
I do try to focus on the end result - positive- but don't you think that a little bit of fear snapping at your heels is good if it pushes you towards that positive result?
 
Most of the people who are retired right now probably never had superanuation, how long has compulsory super been around, 20 years?

Do you think people will be better off financially with super in years to come (as opposed to the pension) or is super just shifting the onus from the government to the individual.

I personally don't think most people will be any better off with super than the government pension, they just think they are because they see the lump sum written in their statements. I'm amazed at the number of aquaintences that think they are going to be on easy street when they retire and have big plans on how they are going to spend their lump sum. "yeh, I'll be set, I'll have 300K in my super to play with" :eek: double :eek:

Both sides of my family are long livers, well into their 90's so chances are, I will too. That 30 odd years of retirement if I keep working to 60. I want to be able to afford to get out and do things not sit at home waiting for pension day so I can eat. I want to be able to afford to take my grandkids places and have a few holidays.

Hence the investments
 
Im not 100% sure that any sort of government Pension will be around when I hit retirment age, (in 26 years time) so THIS is my super.

I agree with you bespoke, I dont want to be one of the ones desperate for the pension cheque and I really really dont want to fill my shopping trolley with no frills everything.

I dont have to be a squillion-aire, thats not the point, I just want to live a comfortable life, now and in the future and have some peace of mind that I'll be able to live a quality retirement.

Nothing in life is guaranteed, but I want to have, at least, some control over my financial future. Long live property investing!!!!

Luvvit.
 
I think "if I sold all my investments, I could own my PPOR outright and have a bit left over and could give up work. :)

Hi Bespoke,

This is certainly a valid option and one worth exploring. What reasons do you have for wanting to give up work now? Some worthwhile reasons could be to raise a young family, spend time pursuing a hobby, looking after a relative (elderly parents etc), wanting to travel etc.

The positive in all of this is that by investing in property you have created the opportunity to be in a position to wind down your work if you so desire. :D

Regards Jason.
 
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Wow. Great post. It is really sad that this actually exists and a wake up call for any investor. Thanks for sharing!
 
Do you think people will be better off financially with super in years to come (as opposed to the pension) or is super just shifting the onus from the government to the individual.
I think super is infinitely preferable to the pension, even if the amounts end up being comparable.

1) It's funded. The amount paid out when someone retires is sitting there waiting to be used. The government doesn't save for pensions; it funds them out of general revenue. This creates the current situation where people born up to about 1930 paid very low tax rates whilst working, generally didn't save for their retirement, and now the tail end of the baby boomers and Generation X in particular, are having to pay for the retirement of two generations - their parents/grandparents, and their own retirement. (I'm not saying it to be bitter or lay blame, but as a statement of fact.)

2) It creates a natural correlation between working income and retirement income. If you're accustomed to "living well", you're more likely to have a super fund to match. If you're accustomed to living on the poverty line, you'll be well-prepared for what you'll get from your super fund (and pension). [My grandparents arguably get "too much" pension; they managed to save about $5K per year from their aged pension until they moved into a retirement home. I obviously missed that saving/thriftiness gene... :eek:]

3) It fosters a sense of personal responsibility, rather than leaving it to the Government to look after you. It's up to each person to check how much super they'll have when they retire, and if that's not enough, raise their contributions.

4) It promotes investment. There's a huge pool of funds being invested in the share market, infrastructure development, etc, whilst accumulating in super funds.
 
interesting.

i was talking to my old neighbour not long ago and she told me the amount she receives hadn't changed significantly in 24 years - gone up about $60 a fortnight in that time.

yay. then she said she wouldn't sell her house coz she'd lose her pension.

tell ya what lady - you're 85. $750k cash is more money than you've ever known, and you're worried about losing $420 a fortnight? buy a little unit for $300k and live off the $450k left over like Marie Antoinette for your remaining years.

no no, need the $420 a fortnight. how would she get by without it....?
 
I have an aunt who is about 56, earns a very low wage, divorced and was awarded the house in the divorce settlement in exchange for not getting a piece of the ex's super.

The house is reasonably large and in a much sort after beachside suburb about 100 metres from the beach. Needs a new bathroom and kitchen but generally probably worth about 600k.

I have suggested she sell up and buy a duplex outright with the proceeds (live in one, rent out the other) and then she will have a substantial boost to her retirement income from the rent.

But.. she is hell bent on staying even though she will have next to no super and will probably have to have a partial government pension because the house is "the kids inheritance". I can't understand it as she was 18 and 21 when she had her kids. Chances are her kids will be close to 70 when she goes, and I happen to know one of them is extemely well off and has several IP's. The other is an absolute bludger and she will admit that.

I'm a parent too but if my child hadn't set themself up for retirement by 70 I'd say bad luck. I wouldn't skint myself for what could be probably around 300 to 350 /week for my grown up children.

Can't understand it.:confused:
 
great topic

my motivation to get into property is that i do not want to struggle like my parents did as i was growing up

i grew up with a father on a low income and my mother a house wife

parents divorced, mum got the house but stuck on disability pension

im 23, i cant remember them having a holiday, so probably havnt for 20 years

i dont want to grow up like that, and have my kids grow up like that

that is my motivation
 
My first motivation in life

I remember being about 10 years old and my sister and I had gone on a holiday with my grandparents.

They took us away for about 1 week every year to very obscure places. I always wanted to go to surfers but they took us to places like Kandos, Hill End, Murrurundai, Wellington and one place I cant remember the name of but its claim to fame was "the town on the $10 note" (obviously the old paper $10 note).

Anyway, I remember we stayed in a caravan park in Murrurundi. It was freezing cold and I saw 3 small kids <about 6 playing around. No shoes, matted hair, dirty faces, and one of them was about 18 months and only had on a t shirt and a nappy. They were living in a very small caravan with their mother, dont know if there was a father around. I remember thinking how frightened I was that I would end up like that and that memory was the one that kept me motivated to better myself until well into my twenties.

My mother also, my whole childhood, said to me "never be dependant on a man, make sure you have skills, can earn an income and can survive on your own if you have to."

She said she knew too many women (of her generation, shes 67) who had to stay in abusive marriages because they had no skills to get decent jobs.

My mother saying this has always rung in my ears, probably not so much now because I know I can survive on my own now if I had to. It did keep me motivated for a time though.
 
My mother also, my whole childhood, said to me "never be dependant on a man, make sure you have skills, can earn an income and can survive on your own if you have to."

She said she knew too many women (of her generation, shes 67) who had to stay in abusive marriages because they had no skills to get decent jobs.

My mother saying this has always rung in my ears, probably not so much now because I know I can survive on my own now if I had to. It did keep me motivated for a time though.

My mother was exactly the same - "get an education, get a good job, set yourself up financially and NEVER EVER depend on a man". All of this advice I have taken on board and am totally independant, perhaps a little too independant. :) I never want to depend on anyone, including the government.

Good initial post bespoke, it is very sad to see people have to account for every single cent and wait until pension day to be able to buy their groceries. I can't even imagine the thought of that. Some may be deserved due to poor financial planning (a girl I work with is fast on her way to that lifestyle, I can not believe the way she lives and the hole she is digging for herself), but then there are others we don't know what their story is and it may be a tragic one so can't really judge. Either way, whilst I'm in a position to be able to set my future up, I want to take advantage of it so I don't become one of them.
 
That's really sad that so many people are so desperate for pension day to come. :(

It's not always what you think. There would be a great many as descirbed above. However there are also many, many pensioners who don't trust banks and the govt.

So every pension day they wait outside the bank for it to open, withdraw every cent and head home again. They keep it under their mattress or wherever and some have 10's of thousands stashed away due to their perceptions.

Quite a common story.
 
Leikela

My in laws are one of those tragic cases. They are now in their 60's.

FIL broke his back in his mid 30's and had to have a (I think) 7th tier fusion of his spine. Has been in and out of hospital numerous times since then. He hasn't been able to work since then. MIL had to go out to work at whatever she could get- check out operator, book keeper etc after being a house wife for around 15 years.

Still, they managed to buy their own home and had several O/S holidays, new(ish) cars etc. Even had a IP at one stage.

They were doing OK.

Then............ they decided to sell their house because they had applied to come to Australia on a elderly parent visa (they are English). They put the proceeds into a term deposit and rented till their visas came through.

They thought they had it all worked out.. and they did. They would come here, buy a house, live off their UK pension and (eventually) die happy having spent their golden years with their kids and grand children.

Then the GFC hit and their bank went bust and they lost the lot! The only money they now have is 60K they had put into a bank account here.

Still they are soldiering on. They even tried to buy a small business to give them an income.

We have now agreed to let them live in a granny flat in one of our IP's if they fix it up (they want to be as independant as possible). MIL is 61 but is applying for jobs.. at 61!

So I guess even with the best laid plans, something can always go wrong.


Steve
I supose my in laws story is exactly why some pensioners would do this eh?
 
I so feel for them. Absolutely hateful circumstances.

It seems that in modern times the old adage has been turned around from if you owe the bank a million then they have a problem to "If the Bank owes you a million dollars then you have a problem."
 
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