Agree.
I was talking about a 5% gross yield - which I believe is a conservative measure of net invested funds required to generate a certain passive pre-tax income.
Share your investing goal
- Thread starter spludgey
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Agree.
I was talking about a 5% gross yield - which I believe is a conservative measure of net invested funds required to generate a certain passive pre-tax income.
Seriously, what is your fixation with what percentile one falls in with regards to net worth? Is it an ego thing? A need to be able to point at others and tell yourself you have more money than they do?
Why not just fixate on the amount you want and bugger the percentile you end up in?
im not so crash hot with this planning stuff, can anybody give me a few pointers
I must admit, ive just been cruising along, and just been doing what I enjoy, and its worked out pretty well
current situation:
Income: 32k part time
Ips: 21
Portfolio: 3.6m
Current LVR: 78-82%
Aim to retire in 10 years regardless of whether I buy/not buy any more ips
$200k in todays dollars would be great
Portfolio is neutral to positive, depends on how lucky/unlucky I get with maintenace etc.
I must admit, ive just been cruising along, and just been doing what I enjoy, and its worked out pretty well
current situation:
Income: 32k part time
Ips: 21
Portfolio: 3.6m
Current LVR: 78-82%
Aim to retire in 10 years regardless of whether I buy/not buy any more ips
$200k in todays dollars would be great
Portfolio is neutral to positive, depends on how lucky/unlucky I get with maintenace etc.
I don't have the whole picture, but it doesn't seem your current situation will get you $200k passive income even if you double it over the next 10 years.
If portfolio is neutral, and your income is only $32k. So the question is... what do you want, not like to have, but want, and how can you get there?
appreciate your feedback, so other then PAYG and business incomes, I gather that most people are planning to $100kpa by buying 1 ip per year on average, and at year 10, assuming they have doubled in value, to refinance one per year, thus creating an everlasting cycle,
id want $100k in todays dollar values
i appreciate this thread a lot, gives a sense of strucutre
Goal changed a few times
$60,000 pa is enough for me.
When I started in 2001 the goal was to buy 15 properties in 10 years then sell and pay down the loans on 5 IP to live off when I retired.
The boom impacted this very quickly as properties became to expensive against my income at the time.
I have a totally different strategy now which is to not sell anything and buy whenever I can afford the next IP, and when I have around $7m portfolio I will draw down $60k from equity to live off. As this is borrowed there is no CGT or income tax to pay and I still have my assets which in theory will be increasing at $350k pa compounding (5%CG)
Thus will be living off only 20% of growth each year which will continue to compound growth. When I loose my marbles my kids can sell.
I would be interested to hear what the guys, who already have a substantial portfolio think of this strategy, as I am sure it comes with some risks. I am also sure my strategy will evolve as I get older (46 now)
$60,000 pa is enough for me.
When I started in 2001 the goal was to buy 15 properties in 10 years then sell and pay down the loans on 5 IP to live off when I retired.
The boom impacted this very quickly as properties became to expensive against my income at the time.
I have a totally different strategy now which is to not sell anything and buy whenever I can afford the next IP, and when I have around $7m portfolio I will draw down $60k from equity to live off. As this is borrowed there is no CGT or income tax to pay and I still have my assets which in theory will be increasing at $350k pa compounding (5%CG)
Thus will be living off only 20% of growth each year which will continue to compound growth. When I loose my marbles my kids can sell.
I would be interested to hear what the guys, who already have a substantial portfolio think of this strategy, as I am sure it comes with some risks. I am also sure my strategy will evolve as I get older (46 now)
21 IP at 3.6 mil averages at 170k each.
At 80% lvr, based on todays interest rates, it would seem like you should be considerably cf+, but you mention only neutral to positive, depending on maintenance, etc.
Considering this, if you could do it again, would you prefer less properties at higher value, depreciation and low maintenance with the same yields?
i.e. better quality properties?
Then again, these cheapies may double in the short term and your 3.6 wil got to 7.2, without doing anything....
Everyone has their own style.
thanks ace, these purchases are quite recent, eg 3 last month
ahh yes, I accidentally lied, I was calcuating based on 100% finance, they are basically neutral, which is the figure I always go on, since I put in between 10-20% deposits, in real terms, yes they are cashflow positive by about $25k per year, incorpriating rates, insurance, water, maintenance, leasing fees etc. etc.
since my income is quite low, depreciation isnt really a priority for me,
as for my future, im happy to go along the 'buying cheapies' path, since I wont have enough for deposits, and that the higher the price, the lower the yields as a general rule,
im trying to decipher whether if I stopped buying now, would I hit $100k or $200k in 10 years, and if I continuted to do buying more but with say 40% less agression, would i hit $200k-$300k passive income in 10 years
thanks everyone
I too was thinking this not so long ago, but Ive come around a little bit. This is China's goal, just like yours and mine!
China obviously has the brains and the brawn to make money, as shown by his current (reasonably) significant wealth. Wether he builds more equity by investing in shares more or less aggressively, by not investing at all and just has the cash sitting in TD, buying a commercial property etc is irrelevant!
That's the fixation - the goal. Let people have goals without rubbishing them, and we should be encouraging them to reach goals!
There's no better feeling than reaching a significant achievement when everyone else around you doubts you can get there!
pinkboy
Thank you. I could not have expressed it more eloquently.
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Fair enough.
Though I don't believe I rubbished him at all. A goal based on being in a certain percentile based on net wealth is by its very definition a goal based on being able to point out you have more wealth than X% of the population.
Also, I never said I doubted he could get there. I asked why it was so important to him.
I just like a solid defined standard to reach. Just like some may aspire to run a marathon, run in the 100m at the Olympics or sail around the world wherein only x number of people or x percentage of people can do or have done.
China's goal is no different to a 100m runner wanting to break a world record, the glory of being the fastest man on the planet! If that's what floats China's boat, then let it be!
You didn't rubbish him, that was a more generalized comment, sorry it was a little directed. Too many people don't give encouragement to peoples goals, and instead, bag out the goal.
Goals and ambition are what sets apart the ordinary from the extraordinary!
The 'why'? Well that's up to the goal setter! That's the most complex and personal question to someone with great ambition! Why? Because I can - and I will!
pinkboy
thanks spades, yes its been quite a journey, lots of blood and sweat
I think ive well passed the aquisition phase, but why stop now is my other thinking, while the other half of me says to go onto bigger things (propertywise that is)
I've noticed most people are focused on income being for yeild. I simply now live of the equity gains from my portfolio. They yeild averages between 4-5% dependent on the city but yeild is only a drop compared to equity growth. Remember you'll never save your way to wealth from savings or rental income. Hope this helps.
I'd have heavily agreed with you a couple of years ago. These days, now that lodoc loans aren't as available, how do you intend to borrow against the portfolio in retirement?
cam, I have a similar goal, as posted above. can you expand on your situation please.
-How many properties
-current equity
-process of drawing equity
-total portfolio
-how long have you been living of equity
I am aiming for $7m portfolio to take out $60k pa to live off, based on an average CG of 5%. Over the long term. I know some years will be nil and others 10%, any tips on managing this.
Thanks
-How many properties
-current equity
-process of drawing equity
-total portfolio
-how long have you been living of equity
I am aiming for $7m portfolio to take out $60k pa to live off, based on an average CG of 5%. Over the long term. I know some years will be nil and others 10%, any tips on managing this.
Thanks
