What's your 'cash' goal?

Because you don't have to wait in line to check in or pass through security!

Agreed, that would be nice. But what price in years would you put on this? I mean, if it cost an extra 3 or 5 years to get to this stage is it worth it? For me, I'd rather my option now than Y-mans option in another few years, although we are all different.

Note - you generally don't have to wait in first class to either check-in or board the plane but yes you'll still get cavity searched at security.
 
All I'm suggesting is:
1. It's good to work out a reasonably good idea of what you need. Otherwise, how else do you know when you get there? ...
2. The 'lifestyle' you desire might not cost as much as you think.
David,

You mean like the attached? ;)

As I said, I'm a micro manager and am all over my retirement planning process. You'll note that I have calculated the passive income required to cover my living expenses as only $80K pa. This allows a projected retirement timeframe of only 2 years (2009) if my investments play out as planned. My point about the $10M base is that you could really "live it up" on that much. I will have the option to quit the day job in a few years time, but to be honest I'm loving it so much at the moment and am earning so much that I might stick at it for a bit longer. Why quit something you enjoy that is paying high six figures?

But I do get your point. Just pointing out that I don't suffer from the "a little bit more" trap.

Gee, now I've really aired my laundry. You can all see my "real" targets and time frames now! :D

Cheers,
Michael.
 

Attachments

  • Retirement Planning v5 (cut down).xls
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The "should be enough" was obviously tongue in cheek. In fact, I already have a detailed budget spreadsheet for my current expenses which I have tweaked for some small upside and then factored into my retirement planning spreadsheet. I am a very organised boy... :D

So, in essence, I guess I agree its important to have a clear goal and work backwards from that, as that is precisely what I have done. Having said that, I'm sure I can find something to put the growing income in retirement to use on. Did someone mention a jet?

That's great. So many people haven't done this.

I do however recall a time many moons ago when your signature said something like 'Goal: $70k pa, Net equity: $1m'. I wrote a post saying, 'Put it in a ING account, you are already there'. You responded that your money could work harder through leverage (which of course it can and is a good answer), I was just trying to hint on some of the stuff I've been writing above. I'd love to see a rough breakdown on people plan to spend $500k - $1m+ pa. I'm sure it's possible but at the same time I can't help but think of the movie 'Brewster's Millions'.

Yeah, I could stay at those uber ridiculous $40,000 per night resorts as well and eat doves hearts stuffed with dolphin pate every night, but would provide enough 'fulfillment' that it would be worth the additional years of sacrifice required to achieve it? For me, I'm not so sure. I'd be just as happy with the $3,000 a night place eating the Lobster stuffed with tacos and snorting cocaine off the stomachs of young Moroccan ladies on my chartered yacht.
 
You mean like the attached? ;)

That's an impressive spreadsheet, thank you for sharing it. Reminds me I should look into shares... :)

It's not what I mean though, I meant something like my post in the above. Annual or month budgets on what you plan to spend this money on (i.e. Fashion - $30k pa, etc). How much you actually 'need' (want), not at what stage will your investments will provide $x pa.

The two functions of 'when can you start the party full time' are 'money' and 'money required / time', so if you can reduce the former (or realise it isn't as big as you think) you'll be there sooner.

Perhaps we need two goals? The financially 'free' goal (that I'm prepared to work 'x' hard to get to) and then the 'lets just see how crazy I can get goal' (that I'm only prepared to work 'y' hard to get to).

$80k is a reasonable 'I don't have to work 9-5 anymore' goal and I could easily see where this money would go. That's should support a OK lifestyle (more than enough to be 'happy' on) and much more than the majority of the population lives on. $250k is a nice figure too. Over $1m pa (every year) I need some help to think bigger.
 
It's not what I mean though, I meant something like my post in the above. Annual or month budgets on what you plan to spend this money on (i.e. Fashion - $30k pa, etc). How much you actually 'need' (want), not at what stage will your investments will provide $x pa.
Yep, got that one too. Its just not on this computer at work, and its also a little bit too personal to share... :eek:

But that's how I came up with the $80K required income to cover my living costs. Anything above that just makes the "luxury" buckets that much bigger. i.e. Eating out, travel, entertainment etc.

Cheers,
Michael.
 
Yep, got that one too. Its just not on this computer at work, and its also a little bit too personal to share... :eek:

Hey I told you about my 'customised' adventure yacht!

Maybe it is best to keep it to yourself.

'What!? $300 for a weekly massage...?! :eek:' Ooooooh! Errrrr, never mind... ;)
 
Hi DavidMc,

you make some great and valid points. i don't think anyone with a goal of $500k or even $1m per annum actually NEEDS that much money to live off; I know that I could live off $100k per annum more than easily.

And people with that sort of goal probably aren't going to go out and eat lobster every night and buy jets and yachts and all those fancy little things that people assume rich people do or have - i know i won't (although I will have my mazzerati and waterfront home)

I think that people aspire to a goal as grand as $500k or $1m simply because they've surpassed their previous goals, they wish to continue doing what they're doing, they wish to continue to challenge themselves, and they wish to generate enough cashflow in order to do "whatever they want, whenever they want" no matter the cost, which includes being in a position to be able to help others without having to give it a second thought as to whether it is affordable or not

just my take...
 
The average man is feed this

[FONT=Arial, Helvetica, sans-serif][SIZE=-1]afsd financial planning centre
The major question is …

How much will you need in retirement?…

Experts suggest you will need approximately 65 - 85% of your current income to maintain your present lifestyle in retirement. If you want to increase your standard of living in retirement, you may even need 100%.

While some expenses in retirement may drop such as job-related expenses and paying superannuation and other taxes, other expenses may either stay the same - or increase.

Your basic living expenses typically stay the same as you will still need transportation, food to eat, telephone, utilities and maintenance around the home. On the other hand, health care costs and medical expenses often increase.

In retirement, your income needs will change …

In planning for your retirement income needs, it is important to know that your expenses will vary in retirement.
[/SIZE][/FONT]
  • [FONT=Arial, Helvetica, sans-serif][SIZE=-1]
  • In the initial years, expenses often increase. Being healthy and active you may likely spend money doing the things you have time to do.
  • In the middle years, expenses may drop as your years become less active, tending to stay closer to home.
  • Income needs in the later years are often determined by the need for medical and nursing costs.[/SIZE][/FONT]
-----------------------------------------------------------------------

I've been reading the twisted / warped views of this funny / strange / abnormal group of people who hang out here :rolleyes: and I'm really concerned for what the average Joe / Joanne has to deal with.

I've had a chat to a few people at work and I realised that most are working toward a future where super makes up their retirement income and they read that they only need 75% of current income to live off. They believe this it's a FACT written in stone something they don't need to think about.:eek:

It's good to look back and see just how far I have come.

I now know I CAN have any income I want it will just some time and effort to get there.

Thanks for the assistance over the years. Threads like this really make me appreciated life.:D

cheers
quoll


 
How much will you need in retirement?…

I guess the key word is 'need'.

If all I wanted was to satisfy my financial needs, I'd go on the dole. That'd cover needs.

It's the 'wants' that require the investing, eh? :p

I think for most people, superannuation seems like a huge amount of money to have waiting for you in the future - especially if you've never been able to save a significant amount. Anyone who's started investing realises that money doesn't stretch that far when you're investing for an income to satisfy wants.

DJ
 
I've stopped reading advice and articles like the one you quoted, Quoll, because I realise I'm no longer 'normal'. Is it really going to help me to read something that advises me to 'save 10% of my income and put it in managed funds for 40 years'?

I much prefer hanging out here. THIS is my reality.
Alex
 
I've stopped reading advice and articles like the one you quoted, Quoll, because I realise I'm no longer 'normal'.
Agree

Is it really going to help me to read something that advises me to 'save 10% of my income and put it in managed funds for 40 years'?
It's not going to help you at all, but it's not going to help most of the normal people either. But it is the standard sort of super stuff most normal people do read.

I much prefer hanging out here. THIS is my reality.
Alex
And a very nice reality it is.

But it's been 10 years since I read this type of info about super and thought gee I might need to contribute some extra super to get it large enough to cover my needs.

The last couple of weeks I've thought about the 60%-80% of the population that does read that stuff and believe it.

I think I'm having one of those looking back episodes and you realise just how far you have come. I'm happy being completely and utterly abnormal.

Cheers
quoll
 
Most of the population will never be rich. Despite all the literature out there that teaches you how to be rich. I'm almost tempted to believe it's a human failing and that we, probably better classified as mutants of the species, have managed to avoid.
Alex
 
1. It's good to work out a reasonably good idea of what you need. Otherwise, how else do you know when you get there? Ever known people to just keep working like crazy even after they've reached this goal? Some of them don't know anything else to do at this stage in their lives as they never took time out to smell the flowers along the way. The other thing that happens is that they get there then think 'now what?', raise the goal and keep on working in a job they don't really love.
I was talking with my wife over lunch today, about this. Investing is a hobby for her, it's fun she enjoys buying houses, trading shares, maybe it's a girl think she just likes shopping, but it is shopping that creates wealth. Why would she stop when we hit a line in the sand that we drew 10 or 15 years ago?

It would be different if it was a JOB or you hated doing it but it's something that only takes a few hours a week. And it's fun.

Different perspectives and a slightly different twist.

cheers
quoll
 
You mean like the attached? ;)

I'd just like to thank you , and others, again Michael for the effort that you in particular put in Via a spreadsheet, which gave me a bit nore clarification as to how to achieve my goals in the near future.

(ooh baby, I'm all aquiver just thinking about it) :D

Its nice to see it in a clear format instead of scribblings on an envelope and an idea in my head.

Thanks

Dave
 
I was talking with my wife over lunch today, about this. Investing is a hobby for her, it's fun she enjoys buying houses, trading shares, maybe it's a girl think she just likes shopping, but it is shopping that creates wealth. Why would she stop when we hit a line in the sand that we drew 10 or 15 years ago?

It would be different if it was a JOB or you hated doing it but it's something that only takes a few hours a week. And it's fun.

Different perspectives and a slightly different twist.

Dunno man. Depending on the exact situation it almost sounds like that's just making money for money's sake. The nexus between money and the lifestyle or choice it can be used to purchase doesn't seem to exist here and is something that does not compute in my reality. If you've already got more than enough to live on, and you don't have a vague idea of what you will use future funds for, it almost seems pointless. Making money just for 'more choice' (when you already have more choice than you could ever require or know what to do with) could almost be seen as a mental illness IMO. Please note - I am not suggesting you or your partner are mentally ill, I am only talking about extreme examples here - you know, the ridiculously ridiculously rich. If someone in this financial situation were to list their favourite hobby as 'making more money' then I'd suggest they try scuba diving, helping others or travel.

If you enjoy investing, by all means continue to do so (I never intended 'once you reach your goal, stop investing' - my view is that as investors we will always will investing, just less aggressively perhaps).

The reason I'm presenting these viewpoints is because for a period of my life my top hobby (or you could say 'purpose') was 'making money'. My focus on this was almost unhealthy, not that I tried to obtain money via unethical means but the lack of other pursuits in my life. I'm not there yet, but once I realised I will easily get there in a pretty short time frame, I had to have a good rethink. I had the 'now what'. I've made some changes and now I life a much fuller, more balanced life. Health, Wealth and Relationships to myself/my partner/my family/my friends/my local community/my global community. I don't mean to suggest anyone here is suffering from this same issue (and sorry if previous posts came across like this), I just wanted to share what I went through.
 
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... Depending on the exact situation it almost sounds like that's just making money for money's sake. The nexus between money and the lifestyle or choice it can be used to purchase doesn't seem to exist here and is something that does not compute in my reality. If you've already got more than enough to live on, and you don't have a vague idea of what you will use future funds for, it almost seems pointless. Making money just for 'more choice' (when you already have more choice than you could ever require or know what to do with) could almost be seen as a mental illness IMO

If one finds himself wanting to make money for money's sake, it's likely he hasn't found the dream of his life, yet. A dream, when found, will provide him unlimited energy, unlimited passion, unlimited creativity. This dream has nothing to do with money. Everything is about the person he wants to be.

As it takes money to build the Taj Mahal, his dream needs lots of planning to get there, lots of money to build and lots of time to reach its grandiosity.

Fighting off his limited background, countless words of cautions from others, and the deep doubtfulness within himself, he started building with his bare hands.

Each day passes, he finds works become a bit easier. He starts to learn new skills, all little things he had never knew before.

Stone by stone. Rock by rock. Paver by paver.

Each stone is cast with love, each rock is handled with tender, each paver is laid with care.

He realises it is not all that bad. He actually enjoys the work.

Each day he lives with joy, each moment he lives with energy, each night he sleeps with eagerness.

An eagerness that night, his angel will appear to show him the solution to the problem he had the day before. An eagerness to see himself in the glory moment of final success. An eagerness to wake up soon to continue where he left off.

He tells to himself: "This is the life I always want to be, the life I choose, the life I love.

A life of joy, a life of care, a life of sharing. A life of intent, a life of purpose, a life of passion.

A life with no fear, no comparison, no resentment.

A life with no mask, no lie, no disguise.

Because it's a life of mine, of my truthfulness, of my self being.

A life devoted for the purpose I dearly love, the purpose I trust, the purpose I believe"

He continues to build, and build, and build. Higher each day the building goes up. There are times when he hits set back, but he never sees it as faillure. Just time to reflect, learn and adjust. Then continues he builds.

One day, he suddenly notices a difference. Somehow, it looks brighter this day. More air, more breeze, more birds singing.

Taking his eyes off the brick he is holding and looking around, he suddenly realises the change around him.

Where he stood when he started, no longer a lowly hole in a filthy swamp. It is now an open view looking far away into the horizon.

He sees the mountain ranges far beyond with white clouds dancing around its tops. The stretching blue ocean plays joyfully with the little cargo ships in its belly. The sunrays weave through his hair, caressing his skins, heating up his lips.

He feels so excited now. The joy quickly rises through his body, through his heart, through this mind, through the cloud nine above.

He lets out a loud scream, a scream of joy, of excitement, of a life fulfilled. He screams so hard, yet the tears keep flowing out of his eyes. The tears that have been kept in there for so long, gushing out endlessly, reaching down the ground and running away like a current.

Looking down, he sees where he stands on, is not a building.

It is a pyramid rising up high above the ground. So high that it has clouds wrapping around its base. Actually, he can not see where the base is.

And he sees, there are little people climbing up the sides of the pyramid, looking up at him, eyes bathing in his aura.

He realises how far his dream has gone...
 
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I am not suggesting you or your partner are mentally ill, I am only talking about extreme examples here - you know, the ridiculously ridiculously rich. I
It doesn't matter what the activity is any thing can be taken to extremes that are unhealthy. So far everything I've thought of can become an illness a problem. People work to much, people work out to much spend too much time at the gym, people eat to much.

Most things are very good in moderation. The hard part is working out when you are doing something too much. Everyone else can see it, you need to listen to them.

Cheers
quoll
 
To those aiming for 500K - 1M in income, can I ask 'roughly' how you see yourself structuring your portfolio to get there?

I've been thinking about the numbers. For me, the aim of the game has been to negatively gear so as to reduce taxable income and enable growth of wealth through capital gain, a product of this is reduced income. i.e. high cg - low cf.

If you are aiming for income are you restructuring to give yourself more income at the expense of capital gain? I guess this would mean that you would not be holding much property? If you plan on 500k - 1M as passive income from a mainly property portfolio I would be very interested in seeing some example numbers!

I don't think the "$10M net at 7%" works as the income comes out a lot lower when I do the equivalent calc using a property portfolio worth $10M net.

Cheers
 
If you are aiming for income are you restructuring to give yourself more income at the expense of capital gain? I guess this would mean that you would not be holding much property? If you plan on 500k - 1M as passive income from a mainly property portfolio I would be very interested in seeing some example numbers!

I don't think the "$10M net at 7%" works as the income comes out a lot lower when I do the equivalent calc using a property portfolio worth $10M net.

Cheers

You could sell up your $10m net equity property portfolio and stick it in ING... as an extreme example.

However in real life, as many others have stated above, I suspect that I (and a few others) would be hard pressed to spend $1m (let alone $10m) per year on living expenses alone. So any "change" out of the living expenses would go into either CG or CF investments (and at this stage I would suspect CG elements if only for tax reasons!)

Cheers,

The Y-man
 
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