woke up a millionaire

[Deltaberry]

Good job Oscar!

Just wanted to add, in a capitalist world, the pathway to significant wealth is always the same:

1. First bag of coins (longest to make)
2. Leverage coins, get first bag of gold (second longest to make)
3. Leverage first bag of gold, make 3 more bags (seems easier at this point)
4 a) Leverage the next 3 bags, make 10 bags (pretty quick here)
4 b) Live happily ever after with 3 bags, make a bag every 2 years or so


Usually the risk is highest at step 4, when you're not that established, maybe even have limited cashflow, but you're trying to make 10 bags

The other interesting thing is always, do you stop at the end of step 3 and just try to make a bag here and there. Or do you use 3 bags and to a step 1 one more time, to make 20 or 30 bags?

 

[mrdobalina]

The other interesting thing is always, do you stop at the end of step 3 and just try to make a bag here and there. Or do you use 3 bags and to a step 1 one more time, to make 20 or 30 bags?

... Then you get to the stage where... as Arnold Schwarzenegger said:
"Money doesn't make you happy. I now have $50 million but I was just as happy when I had $48 million."

 

[ok180]

I was actually happier when i was 19 and had no money. All i had to plan was what i was going to do on Saturday night.

 

[Deltaberry]

I was actually happier when i was 19 and had no money. All i had to plan was what i was going to do on Saturday night.

I must say I am happier now, knowing I can sleep at home for the next 60 years and live fairly comfortably, rather than at 19 when I had to think about what I'd be doing for the next 20 years.

 

[ok180]

When i was 19 i had no interest sleeping at home.

 

[allsuccess]

Very inspiring. Thanks for sharing.

 

[VYBerlinaV8]

Further to this, we cracked $2M equity last year, 4 years after cracking $1M.

We're taking a conservative approach, and I hop to crack $3M within the next 4-5 years, then add $1M every 3-4 years after that.

The second million was a lot easier than the first.

 

[Tonibell]

Further to this, we cracked $2M equity last year, 4 years after cracking $1M.

We're taking a conservative approach, and I hop to crack $3M within the next 4-5 years, then add $1M every 3-4 years after that.

The second million was a lot easier than the first.

I'm interested in how you estimate this.

I am assuming the PPOR value is included and other assets are at an estimated net realisable value.

We would have a fairly large range depending on how you go about it.

 

[starter]

Further to this, we cracked $2M equity last year, 4 years after cracking $1M.

We're taking a conservative approach, and I hop to crack $3M within the next 4-5 years, then add $1M every 3-4 years after that.

The second million was a lot easier than the first.

Would love to hear your story as well!

 

[jackbak]

Oscar & VYBerlinaV8 just wondering do you include your PPOR in your equity calculations?

Also, Oscar do you or have you had any dependents?

 

[Rickardo]

Regarding net worth calculations, I work mine out using two separate methods.

1) Net financial assets (ie do not include cars, household furnishings etc) including PPOR equity and superannuation.

2) Net financial assets exclusive of PPOR equity and superannuation (as detailed here)

While the first method gives a good overall view of your lifetime net worth, the second gives you a much more realistic picture if you're trying to retire from paid employment well before retirement age. It basically answers, if I'm too young to draw out super but wanted to retire tomorrow, how much would I have available?

 

[VYBerlinaV8]

Regarding net worth calculations, I work mine out using two separate methods.

1) Net financial assets (ie do not include cars, household furnishings etc) including PPOR equity and superannuation.

2) Net financial assets exclusive of PPOR equity and superannuation (as detailed here)

While the first method gives a good overall view of your lifetime net worth, the second gives you a much more realistic picture if you're trying to retire from paid employment well before retirement age. It basically answers, if I'm too young to draw out super but wanted to retire tomorrow, how much would I have available?

I do basically the same. I use the first calculation for net worth (including PPOR, investments, cash and super), and the second for 'investable value', which is only investments and cash.

 

[jackbak]

I do basically the same. I use the first calculation for net worth (including PPOR, investments, cash and super), and the second for 'investable value', which is only investments and cash.

Thought so, thanks VB. Im at about $750k now, hoping to increase by at least 10% a year

 

[Peter Parker]

2) Net financial assets exclusive of PPOR equity and superannuation (as detailed here)

A problem with 2) is it's distorted by your PPOR equity and mortgage.

Eg someone with a $500k PPOR (and $400k owing) plus $1m net in other investments is in a very different situation to someone with the $500k PPOR paid off and the $1m net in investments. The person in the first case would likely want to pay out their PPOR mortgage before retiring, whereas the second person lacks this problem and can enjoy the income generated by an extra $400k of assets.

How about deducting ALL debt (that is PPOR and consumer as well as investment related debt) from your assets to arrive at a net figure? The example above with the PPOR mortgage would produce a figure of $600k, which is still handy but less that what most would consider sufficient capital for a reasonable retirement income.

Assuming that you'd want to own a PPOR outright factoring in the paying out of its mortgage before retirement is conservative but fair. It also illustrates the common problem of people having most of their capital tied up in their PPOR. While this is effective 'forced saving' it is not the way of the financially independent who need >80% of their net equity in non-PPOR income generating assets. That is unless one's strategy is based on selling their expensive PPOR, reaping the capital gain, and being happy with a cheaper place or even renting.

 

[Oscar]

Oscar & VYBerlinaV8 just wondering do you include your PPOR in your equity calculations?

I don't have a PPOR. My company provides my housing for the last 5 years and before that for another 4 years. They pay full rent. It's pretty fabulous too...

 

[Brady]

Not sure if you have already... But do you care to share purchase price, year purchased and current value. As a bonus if you could throw in suburb would be great.

Would be interested to know what sort of growth you got from the properties and how much was just a case of purchasing and paying down the debt.

 

[Oscar]

Brady - I'd rather not go through all the details.

One example are properties I bought in Randwick/Clovelly for approx $1.4MM now worth approx $2.6MM, so that's $1.2MM of equity created from thin air. Similar examples at different scales with Australian shares, US stocks, US property etc.. Also savings from cash bonuses and stock options from the JOB.

It's a combination of many factors, mainly, spending less than I earn and conservative investing over a long period of time with a long term buy and hold mentality.

 

[D.T.]

Earning 500k and not paying any rent must simplify things a little

 

[Oscar]

Dave, it's one of the better problems to have in life...

 

[Oscar]

*bump*

Well it's now just over 10 years since I posted this thread. I promised another milestone update at the next million in equity and now happy to report that $4MM in net equity has just been achieved. I've been hearing about the so called "snow ball effect", always understood it intuitively, but feels real good when you get to experienced it

- first million achieved in 2003, I was on the right side of 40.
- took 6 years from there to get to $2MM equity
- another 3 years to get to $3MM
- under 1.5 years to get to $4MM

If I look at how the last million was created;
- about 70% of it just growth from existing assets (property and shares, local and international)
- about 30% cash savings.

My investments are still very simple ones of the buy and hold type and just focus on quality assets.

My biggest asset is my job right now and I hope to keep it for a few more years at this stage.

cheers everyone...

......The journey continues and life takes a new path. The above was posted in February this year, and not 8 months later, I have more than 5 million reasons to smile.

The growth this time came partially from asset growth (property, shares both local and international), but mostly from kicking in my JOB and accepting a golden handshake.

I have now obtained financial freedom for my wife and I. It feels very good to achieve that. After a good break I will take on another corporate role (asset) in the new year, and enjoy the intellectual stimulation while making more income from my investments and my work. I have started running again, and god willing, will have many more options in the future for an abundant life.

cheers everyone