What income from investments do you need for financial freedom?

[sash]

Most of us on SS invest with a view to financial independence.

I thought it would be interesting what sort of income people think they need to be financially free....- i.e. over a JOB (Just Over Broke).

I appreciate that this will be different for everyone but never the less would be good to see.

I would be comfortable on 150K though 200K would be better.

 

[Xenia]

$1 million per year in passive income would be great.

 

[HiEquity]

$1 million per year in passive income would be great.

Now that is the definition of a true millionaire!

I've seen too many people underestimate the amount they need to live off for the rest of their lives in order to support their desired lifestyle - I don't plan on making the same mistake so I'm targetting the bottom of the chart.

Nice idea for a thread sash - I was just about to post a similar "how much is enough" thread based on some other discussions around here... you have saved me the trouble!

 

[grossreal]

hi
simple answer to your it does require you to do a bit of rethinking but will try to explain
financial freedom is where you income out strips your expenses
and wilsons law states that as your income increases so does your expenses in the same basic numbers.
so most people think that financial freedom is created by creating income from asstts
well thats not right
or I should say its not right in my thinking.
if you can form an income stream external to your main assett class that is an ongoing income stream and that stream forms part of your expenses then if your income or residual income stream is more them your expenses and as your expenses increase so does your income stream then you have financial freedom.
so if say your expenses are 20k per year and you had 25k residual income thats income comming off an assett class not a job
you would be financially free.
everyone is different
and people have lots of ideas of how to achieve different levels and I would not post those anyway.
the reality of your question is 0 or really neutral
it really depends in what you invest in
instead of think how much do I need in investment to be financially free
try this for a bit differents
what do I have to do to gain recuring income streams that will cover and out pace my expendature.
and try to make those ongoing and set
this is not advice just a bit of an idea

 

[yadreamin]

A lot more than l am getting at the moment.
I hope l live long enough for my Ips to sustain me
cheers
yadreamin

 

[Aaron Sice]

without a mortgage - maybe $2000 a week would be livig it up.

 

[chilliaa]

$500k a year or roughly 10 times average australian earnings is my target.
Still got a way to go, but the GFC has been a godsend to value cash flow type investors such as myself.
The whole investment portfolio has gone from roughly cash flow neutral (before any tax benefits) in 2007 to roughly $120k p.a cash flow positive now with $300k of additional equity contributed.

 

[13910]

I presume the figures list would rise with inflation?

I already earn more than I really need to just to live - not on a special income by any means, I just don't do/buy much. So even if I double what I'm currently on - to account for increased expenditure (since I'd have so much more spare time) and some for stuff I'd like to do, but am too money conscious now - I'm still in the 70-150k bracket. Its true the more you earn the more you spend, but I'd be comfortable living life in that range.

Ultimately, though, I'd still work in some capacity. I hate free time - company keeps trying to force me to take annual leave.

The whole investment portfolio has gone from roughly cash flow neutral (before any tax benefits) in 2007 to roughly $120k p.a cash flow positive now with $300k of additional equity contributed.

May I ask, how many properties in said portfolio?

 

[JIT]

Enough!!

The very rubbery figure I'm working with now is 500k p.a. net passive income...

 

[devo76]

No debt and $1500 per week or 5 of my target range ip's.plus 1 for costs and that's it. I'm done. So I'm aiming for 8 to 10 by 2016 then let there equity build until 2026. Sell a few then kick back . If I do better. Great. If I don't make it, well even one property paid for is better than none.

 

[Piston Broke]

omg another sash poll... but i do like this one a little better.

>30K!? Live humbly?
Geez I do live humbly, but that's ridiculous!
I just splurged $100 for new shoes as my old current ones are both torn on both sides now (there's a GFC!).
But I could live happily with 70-100k of after tax income and have some play money left over.
I doubt I would stop trying to increasing it, having not much to do causes too many expenses and it would'nt last long.

 

[Kristine..]

Financial Freedom is the question, not greed or a Walter Mitty attitude to life.

For many people, the Pension is the Holy Grail and provides financial freedom at the end of 50 years of working life

The Pension, meagre though it may be, arrives in your bank account and you don't even have to get out of bed to collect it.

However, $14,855 for a single Pensioner or $24,814 to share for a Couple, is not exactly living high on the hog!

My aim has always been to have about $50,000 per annum (in today's dollars) in disposable income

At a return of 5%, that means having $1,000,000 in income producing assets, plus a place to live.

I see this as readily achievable by anyone prepared to show a little fiscal management. It is not a pie in the sky but a real and simple goal.

$50,000 per annum for two people with no dependents living in their own home would provide a very comfortable lifestyle to the point where money would not need much thinking about.

Our neighbours two doors down retired when he was 46 and they sold their trucking business. They have been retired for 30 years. They travel somewhere in Australia each year and overseas somewhere each year and spend three months in their unit in Queensland close to where one of their married children lives, and the warmer months in Melbourne where their other children live.

They have a nice caravan, two late model cars, the house here and the unit there, they are both healthy, they live a comfortable life and please themselves what they do.



Who could ask for more?


I am grateful that I have had the opportunity and the willpower to create my $50,000 per annum which will continue ad infinitum. I really wouldn't know what to do with $200,000 per annum, it would just be numbers in the bank.

Cheers
Kristine

 

[devo76]

Financial Freedom is the question, not greed or a Walter Mitty attitude to life.

For many people, the Pension is the Holy Grail and provides financial freedom at the end of 50 years of working life

The Pension, meagre though it may be, arrives in your bank account and you don't even have to get out of bed to collect it.

However, $14,855 for a single Pensioner or $24,814 to share for a Couple, is not exactly living high on the hog!

My aim has always been to have about $50,000 per annum (in today's dollars) in disposable income

At a return of 5%, that means having $1,000,000 in income producing assets, plus a place to live.

I see this as readily achievable by anyone prepared to show a little fiscal management. It is not a pie in the sky but a real and simple goal.

$50,000 per annum for two people with no dependents living in their own home would provide a very comfortable lifestyle to the point where money would not need much thinking about.

Our neighbours two doors down retired when he was 46 and they sold their trucking business. They have been retired for 30 years. They travel somewhere in Australia each year and overseas somewhere each year and spend three months in their unit in Queensland close to where one of their married children lives, and the warmer months in Melbourne where their other children live.

They have a nice caravan, two late model cars, the house here and the unit there, they are both healthy, they live a comfortable life and please themselves what they do.



Who could ask for more?


I am grateful that I have had the opportunity and the willpower to create my $50,000 per annum which will continue ad infinitum. I really wouldn't know what to do with $200,000 per annum, it would just be numbers in the bank.

Cheers
Kristine

This wouold be my ideal lifestyle. Sounds great. Add a big garage to tinker on things like old boats and cars and i would be set.

Actually one other dream is to have a ppor i can fish from. Im looking at a property today that fits this. But it may remain a dream. Who knows.

 

[topcropper]

Actually one other dream is to have a ppor i can fish from. .

As in something that floats...boat...houseboat..??
Or a ppor that has a balcony you can fish off..??
Or an acreage property with a river going through..??


See ya's.

 

[GreenTreeFrog]

$1 million per year in passive income would be great.

My absolute minimum too!

 

[devo76]

As in something that floats...boat...houseboat..??
Or a ppor that has a balcony you can fish off..??
Or an acreage property with a river going through..??


See ya's.

Boat wise i like the idea of doing up older boats in my retirement. Nothing too hard and breaking even would be fine. Just for the enjoyement.Same goes with cars although i would have one i would keep. Thinking HK monaro.

A PPOR i can fish from can go many ways.
Beachfront
Riverfront
Dam stocked with fish.
Im looking at the riverfront option today. does flood in a 1 in 100 event but needs reno and i would build elevated so i can where that. Great jew fishing hole right in front

 

[13910]

Same goes with cars although i would have one i would keep. Thinking HK monaro.

You'd be able to keep one, but with the money you've said you'd be happy with and the direction petrol is headed, you won't be able to afford to drive it!

I like what you sell though. I'd probably restore a Ford Escort (random, I know, it's a long story) then get in to much older things. A friend has an old Austin (Sheerline I think) sitting on their farm, with grass growing in it, that has my name all over it.

Cheers
Greg

 

[grossreal]

hi all
couple of things
when you do retire most have an income of 15k per annum singles here
now only 2% have over 45k in residual or usable income.
the idea that your expenses increase is a little wrong the retirees cost to live lower but cost to be health increase.
so the idea is to be healthier, live longer and have income from different sources.
the golden rainbow of retirement to some is just that its a merage its something that you can see it but it will never become a reality.
if you want to get some where you have to plan for it.
its not a case of how much do I need when I am 60 its more a case of how do I cover the expenses that I will incur when I am 60.
and that not some thing to explain fully on a board as its a mind set.
to plan on an amount without a vehicle or vehicles to get you there is like trying to get to a shopping centre is a suburb you don't know the name of the direction or even the name of the store
if you tried to do that you would be stood there for a very long time trying to get direction.
if you plan first the route.
then the vehicle that will get you there car plane bus or even boat.
then get a map
and the work out the cost
you will get there
and you have to do this the same with financial planning
now the bus boat plane or car could and can break down and what do you do then
simple get on another boat, plane,car or bus
but the plan is still intact.
and you are aiming still at the destination you want to go to.
if you do it the way most do
just buy investment properties or shares or evem businesses without that focus
to me you are on the corner trying to find that shopping center and I will wave as I go past on the bus.
investing is and a few here have said
its a mind set you must know where you want to get to
before you can plan a way there.
oh an if you do plan and you plan correctly no matter what gets in the way your plan will find a way around it.
the only thing your plan can't avoid is death
all other things can be got around.
think of your self at perkins and you want to get to that line to win gold.
and you gold is what you want
there would be nothing to stop him so whats stopping you.
simple
people worry about have they made the right choice
have they invest right
will this go up or down
will the gfc effect me
will this or that happen
or even will grogon happen
to me this does not nor will it effect my plan.
this are humps in the road even land slides in some cases.
simple
jumps out of that car and into another and back on the journey.
we all have a journey in life
but people that say this person or that is lucky or I could have done that
yes you could you just didn't.
you want financial freedom
well let me tell you how to get it
plan for it
decide to get it
focus on getting it
and make it a dream
because as I posted some time ago a man with a dream will never be denied.
this I believe to be true.
you can poll all you like.
and you can keep looking for that rainbow.
but without a plan its not a dream it wishfull thinking
AAAA ..... ,,,, add as needed

 

[VYBerlinaV8]

I love threads like this - keep the dream alive!

My target for my wife and I is to have a combined investment income of 150k per year, in 2005 terms, and to have no PPOR debt. This would allow us to spend 50k per year on travel, 25k per year on expenses (generous I know), and have at least 25k per year left over for whatever else we choose, which would include supporting church/charities. All in 2005 dollar terms, of course, and considering tax to be paid (which we will structure things to minimise).

To do this, I figure I need 8 IPs plus half a million bucks worth of shares. Currently have 4 IPS and just over 100k worth of shares. I also have 12-15 years to go. I make geared contributions to the shares monthly, and figure I need 4 more IPs over the next 6 -7 years. I have 2-3 years to go until my PPOR is paid off completely. I'm currently 33, and want to retire at 45-48.

At this stage, I think we are on track, although even if we don't quite make it we should still be fairly comfortable. We may even if we work part time for a bit.

 

[chilliaa]

May I ask, how many properties in said portfolio?

2007:
5 residential properties (apartments)
$40,000 exposure to australian stockmarket

2009 to date:
5 residential properties (apartments)
$2,200,000 exposure to australian stockmarket