What income from investments do you need for financial freedom?

[battler]

So maybe everyone thinks their children are going to be living next door and have the time and energy to get you out of bed, wash and dry you, put you in your wheelchair, get your meals, clean your house, do your laundry, track your meds, and take you off to doctor's visits and outings in the park.

No I don't think that.

maybe you think the Fed govt is going to have the tax revenue to provide a nice villa or room with a view of the ocean

No I don't think that either

and a 25 year old blonde personal carer to do the above.

Vaguley remember something about this

health insurance premiums for over 50s are going to be very interesting over the next 30 years......as are Rudd's medicare levies and surcharge plans.

Yes I understand this, but I have two choices, I can provide for my family, pay my taxes (including for an old age pension that I can't get), free up a job, retain the assets to provide for our own aged care and have a quality life or I can work until 70 get the pension, if there is one and then accept whats provided for health care.

 

[investor_eddie]

My rule has always been to live on 50% and invest 50%

100k would be enough for me to throw in the job. I can live comfortably on 50k and that would grow over time with investing the other half. I can't see myself 'retiring' as such, just a full time investor with a lot of spare time

 

[WinstonWolfe]

In the meantime, I enjoy my work and each day as it comes.

I hope you do, too.

For the most part, enjoyment in life is determined by what one thinks the meaning of life is, and the aspirations they build on that.

Set simple material goals and arguably you can be a lot happier than if you set more aspirational goals.

Mahatma Gandhi may have had a more comfortable life practising law in England, rather than returning to India to fight for Indian independence.

Aung Sung Suu Kyi would have enjoyed freedom if she stayed in England, rather than return to perpetual house arrest in Burma because of her struggle for Burmese democracy.

I always try to weigh the value of what I do and invest in by the amount of good it does, rather than the amount of money it puts in my pocket. That's the price I pay for a loud conscience, something I'd not exchange for all the tea or yuan in China.

Of the many oldies I've dealt with professionally, and the dozen or so I've been with as they died, their happiness was more based on peace of mind, rather than health, family, or material comfort.

I raised the downside of the final half of life here, because we live in a culture that prefers to hide it away, out of sight and out of mind, and support people in denying it will ever happen to them.

 

[grossreal]

hi The_Bludger
let me tell you there is no thing as
sure of it
the only sure thing is death
even taxes change
I am sure of nothing
and if you read my post I am sure of alot of things but capacity to fund is one I am never sure of.
you may well think that super and investments will see you thru
well you are a better man then me gunga din.
I know that most people here will not be able to have the life style they want
not because they can't have it but because the goal post will have moved by the time they want it
super forget it
I just looked at my super and its backwards by 35% of capital and thats a major.
if you are young and you have time then use that time to invest
but invest in three things
first yourself
grow in your knowledge or train yourself in some thing to make income that could be shares could be property could be gold I don't care but some thing you are not in at the moment
next a plan or path
this is a on going thing and changes all the time next investments of a money value what ever that is

and thats it

notice no super
as thats a fuel not a vehicle
and
investor_eddie
you have a plan
that puts you way out infront of others that have no idea they just want to buy
now your plan could be wrong
but thats fine just adjust it to be right.
as for aged care
have you been there
have you work or dealt with one for business
do you understand how they work
and do you know what or how they work
if the answer is yes
then the question is
do you want to go to one
the answer is no.
after 60 the world is a very different world
but thats not this post
but to get thru that you are going to need a very strong and very well oiled vehicle.
it has to be tested
it has to be secure
it has to have been attacked to make sure its secure
and it has to be able to last the test of time
and unless you have that structure set from the start you are building a sand
castle and those castles and starting to come down.
winston
many people have given away the capacity to make minor fortunes because they wished to stand by what they have stood for
some their lives
the question here is what income do you need to be financially free
people think that to be finacially free is income based well
what do you want
do you want to have the capacity to not have to go to work tomorrow
to have the bills paid for
to have the mortgage covered
to have no mortgage on the ppor
to have enough to go on holiday on money not credit
to cover all bills
and to have this for the rest of your life
what do you see as financially free
you need this question answered first

 

[battler]

the question here is what income do you need to be financially free
people think that to be finacially free is income based well
what do you want
do you want to have the capacity to not have to go to work tomorrow
to have the bills paid for
to have the mortgage covered
to have no mortgage on the ppor
to have enough to go on holiday on money not credit
to cover all bills
and to have this for the rest of your life
what do you see as financially free
you need this question answered first

Hi Grossreal,
And if this also covers your aged care, would you consider this financial freedom?

 

[grossreal]

hi battler
no
for me aged care is made up of three parts
aged care
full care
hostel waiting for death
people call it lots of diffferent names but its the same
and designed and built thru different groups all three
for me I will be on a boat out to the pacific before aged care.
aged care is not in my plan
a bullet is before aged care
I am a right to life but a right to death person also
I will have a choice when my death is and no body will govern that
my structure will live along time longer then me.
for me financial freedom and I do have people that I explain this to
is the capacity to live without any income for 12 months from external entities that you don't have control over
if you can get not an income but a benefit and you don't have control over and it gives you benefit forward of today and that can be gained from external to you
but can cover all your personal costs thats financial freedom
people ask how can I be financial free
as is the case with this post
the answer is you cant
the question should be what do I have to do to be financially free
now the answer is very different.
you can ask a financial planner
ask them are you financially free
if its yes follow them
if no start again
you can ask an accountant
do the same as above and the answer will be no
ask a board
and you will get heaps of the same as this post
or you ask a simple question
what do I need to do to get financially free
now thats a plan
and you need to do everything that the person tells you.
are you willing to do that
the answer is no
start again
simple saying
when the student asks the teacher will appear.
people hate amway but I have put my view
you want to be financially free
you need to understand what, how and help to get there
financial freedom is in your mind
you need some one to work out what you want to get this freedom
you will get freedom but you can't get some thing you don't know what it is
you want to get
for me understand what you want and then decide how you will get it.
my plan has no aged care
I will have care from entities associated with my groups

 

[The Fence]

I raised the downside of the final half of life here, because we live in a culture that prefers to hide it away, out of sight and out of mind, and support people in denying it will ever happen to them.

Absolutely WW...it's called the mortal ingredient in my investing philosophy...I never forget where I came from as much as I never forget where I'm going to end up...ashes to ashes....

 

[battler]

for me financial freedom and I do have people that I explain this to
is the capacity to live without any income for 12 months from external entities that you don't have control over

Thanks GR, makes sense to me and that is what we've done.

 

[chilliaa]

Interesting comments from all, especially about the value of time vs prosperity.

Personally i have stuck to the matra of spending only 30-35% of my income.
For the first 3 years of working out of Uni this was dam hard, not only did i have to hold down a job as a graduate accountant, but i was also doing evening jobs with pamphlet letter box deliveries, and a lolly distribution business on weekends.
It was the only way i could make ends meet and keep to a 30% expenditure level.
But this also had a silver lining in that it enabled me to save capital fast, which i then invested in my first business at 24.

As the years went by its become easier and easier to hit the 30% expenditure level, and the funny thing is my lifestyle actually improved exponentially, because i include cash flow from all forms of investment (whether business or passive) in that 30%.

My final target is as mentioned above $500k a year, at this level i think one as total financial freedom. Of course you cant live the lifestyle of Paris Hilton on this, but then who would want to
$500k a year allows one to just about do anything reasonable for the rest of their life.

I respect others views because its a personal choice, but for me i believe i only have one life and i want to squeeze as much juice out of it as possible.

Am i living the life of a pauper to achieve this? well
between the age of 21-26 yes definately, live at home, drive a bomb, shop at k-mart etc
between the age of 26-33: still living a conservative life, things have become easier, started travelling overseas 3 times a year, shop at myer, bought a second hand sports car (just a 5 yr old Prelude nothing fancy), bought my first versace suit (only one though).
between the age of 33-35(the present): starting to spend more, bought a new car, started going to a-grade restuarants around melbourne once a month or so, still just travel overseas 3 times a year because of time contraints, but increase the expenditure budget, stay at better hotels. Shop at David Jones.
Most importantly i can start to help my parents more, recently gave them $20k so they can upgrade their cars.
Small monetary items have no meaning (or pain anymore).

Next step be able to give my gf a 10% deposit for her first investment property.

Longer term goals:
1) Go to live in a buddhist monastery for 3 months in thailand
2) set up a school in rural thailand employing western teachers for the poor

 

[evand]

Did'nt you say in a previous post that your income from your share portfolio is $45k /wk?

How do you manage that?

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

 

[chilliaa]

Did'nt you say in a previous post that your income from your share portfolio is $45k /wk?

How do you manage that?

You are taking it out of context. I was merely refering to the appreciation of the shares over the last 4 months (at that point) expressed on a weekly basis. Because you are a trader (and there is nothing wrong with being a trader, there are just different rules by which you manage your money), you regard that as income, i just regard it as capital appreciation You assumed that that could be annualised over a year.

I was actually being rather sarcastic because i also mentioned it was unrealised profit and thus what the market gives the market can take away. But for me thats not the primary focus. The primary focus is the income generated from the assets vs the market value. And more importantly the growth rate of the income. For shares thats grossed up dividends.

 

[cloudyday]

what income do you need to be financially free?

Depends where you live.. really.

$50K/year will get you a very nice luxurious life in many countries.

 

[INVSTOR]

Are people factoring in R&M expenses on resi properties + other large expenses?

Assuming you were retired and had 5 resi properties fully paid off + PPOR + second hand car.

1st year - had to spend 10k on property 1 to update it as looking old.
2nd year - spend $10k on property 2 - as above
3rd year - $10k on property 3 - as above
4th year - $10k on property 4 - as above
5th year - $15k on property 5 - as above
6th year - $20k on PPOR
7th year - update car, $25k

Would it come from your income or would you borrow money for expenses against assets?

Or are you planning on having shares, business, commercial prop, maintain properties yourselves, work part time, etc to cover costs?

 

[grossreal]

hi all
I had a very interesting seminar last night
and being financially free was part of one of the topics
and a person that is finacially free made a very interesting point
if you want to be free only you can plan and do that
and planning and righting down how you will do it is the most important thing
and then
just do it
to be finacially free you need to reducate your mind set
and to do this you need to learn
re think
and look at things in a different light.
are you free if what you have can be taken away in 1 or 2 weeks
gfc
are you free if
you plan on property and the market drops 50% over night
are you free if you by comm and the comm market falls thru the floor and tennant walks out
or are you free and believe that the government will provide for your retirement or even super
are you free
or are you free when you a diverse structure that allows for these movement
if its the last well then plan for it.
I am not going to post the alixia to financial freedom
I will tell you one thing.
if you don't plan you will not achieve it
you will achive something
financilly free
keep trying
1% of most in aust by 65 will not be financially free
and of those by 75 will have to do some sort of work to keep to there plan I think the numbers are 50% of that 1%
so if you want to get there
for me its simple
you want to get gold in the olympics
you need to train
work at it
study
and do what a coach tells you to do
and then you still might not get gold
but you have a hell of alot better chance.
oh and also have alook at the numbers the baby boomers have not hit the cost of money markets yet
they have not become a drain.
when they do and they will you will see alot of changes in my view.
so happy times for all
I read with interest alot of the posts as I have not read one yet that has got to financial freedom.
I read the living on equity with the same view.
I was at a seminar last night as above
and in that room
there was over 500 people that had financial freedom
not only that but I have others that I deal with that are financiall free and they are in property and shares but have a diverse system
so it is very achievable
but it does require a very different mindset
and also a very different way of looking at life
and when you find that then and only then will you be able to get there
but thats just my view
and don't let in cloud your ideas

 

[Dazz]

I read with interest alot of the posts as I have not read one yet that has got to financial freedom.

If that's the case you need to read and comprehend a bit better.

There are quite a few on SS who are at this stage, especially quite a few of the older members who have been in the game alot longer than you have ol' son.

They know who they are.

 

[grossreal]

hi TPFKAD
are they financially free
there is a big difference and thats what this post is about
can they walk away for 12 months and have no issue with funding there retirement
this is very hard to do
and its not impossible because I know a few that are at that stage
and they could be on this board and yes there will be alot that would be in that group
but yet to hear of one here.
financial free is not the same as living on equity.
financially free
have we any one here that can say they are at this stage.
I have a couple of people that are at that stage and they are not on any boards nor I think would they want to be but one is well past being financially free.
I would be very interested in what people see as financially free and do we have anyone here that is at this stage

maybe TPFKAD you could pm them
and owning a large comm with an income is not financially free.
because the comm can change very quickly
financially free
is when it does not matter what happens within any economy that your structure still brings in the same income
to build a structure that does not get effected by external economic problems not only is very difficult but it is very long term to put in place
but there could be someone here
post please
I am here to learn
tell me have you got financial freedom
did the gfc not effect you
is your income stream the same now as it was 2001
even higher
is your capital base the same as 2001 or higher
and will it be the same or higher 2020
if so tell me how you have done this
pm me if you wish

 

[VYBerlinaV8]

I think it's about working out what will happen in a practical sense, and making some assumptions around he severity of negative events and managing that accordingly. If you can effectively manage risks relating to events that have greater than 5% probability of occurring, I think you are doing well.

If you had, say, 10 IPs that you owed no money on, and they were rented at an average of $400 per week each, would you really be worried about fluctuations in their capital value? I would be more interested in fluctuations in the rental market. Of course, you could manage this risk by having them on 12 month leases, and making some sensible assumptions around how weeks per year of rent you actually expect to collect, and also by living a bit below the income received to build cash reserve.

You could also reduce risk a bit by having both shares and property, again understanding the risks involved.

I think we spend a lot of time thinking about capital values, when the end game is all about cashflow. As well, you always need to keep in the back of your head the concept that things in your life can change, and you may well need to change your plans later on, which may include going back to work.

The way I see it is simple. Even if my plan doesn't work properly, I'm still likely to be a long way ahead of someone who has done nothing. And that, frankly, is good enough.

 

[pully]

interesting thread.
my 2 bobs worth. this is a subjective question for many. it also seems it is not purely related to the amount of money people perceive they need for financial freedom from investments.

i have met people who are very wealthy but who will say or imply enough will never be enough. the sense of insecurity is so strong and long standing.

it is a great comfort to feel safe and secure and not have to worry about how much or when the money comes rolling in.

but i think we all know too that feeling well and healthy is more important.
however i agree wellbeing can be related to having a good strong financial base.

life is short and regards aged care, some do not even get to experience that stage of life.

just a few thoughts.
regards

 

[joanmc]

MY vote was for the 150-200k range but that is an ideal figure for an extravagant lifestyle.
I consider myself financially free now because even if I lost everything I KNOW I could do it again and a heck of a lot faster because of what I have learned in the last 10 years.

that to me is freedom.
freedom from worrying about how to pay bills
freedom from wondering how to pay of my home
I am free of all those worries connected with financial survival.
Sure it brings about other types of problems...tax, structures etc but I look at those as part of running our "business" but on a day to day basis- I am free.

 

[Cherry Pro]

Kristine and Winston Wolfe ...thanks for sharing some really insightful posts !

Amelia