Yearly earnings

[want2bewealthy]

I've been thinking about others lately, general employees to be precise and I've been looking at all my workmates. Some earn around $100k p/a PLUS company vehicle..! while I don't earn half that, most are still renting.. one has a few investment properties, some are paying a modest mortgage. While it can seem depressing earning a low wage at first glance, keep reading, this oughtta' cheer you up

Make '$55,000' gross a year thats pretty miserable isn't it..!
But that's not where it really ends. earn a further $60,000 in rents and instead of paying a larger amount in tax for the privelage, receive a tax refund to the tune of pretty well my entire tax outlay +$10,000. (or, pay no tax). But wait, there's more! On top of that, receive around 7% growth p/a across my entire investment portfolio.. (which isn't huge but it's pretty good for a low income earner) of around $120,000p/a. So tats a grand total of $255,000 a year. And instead of reducing that by 50% like any normal income earner, I don't pay tax on that until assetts are sold. They can be strategically deferred by choice, or not sold which are good options. Down-side is: My overheads, they sit at $74,000p/a (but still only about 35% on earnings for that year) Most of this is going into my mortgage,

People who earn $255,000 from a job are charged tax at a very high rate and lose around half of that, but us property investors are allowed a 50% CGT discount on any profits earned.. I have counted my home on the asset list because it does technically grow in value like the others and once paid off, provides a nice payrise. By that stage the IP's will be providing surplus cash and the figure will change for the better

I hope this helps cheer some other low income earner up
Bye

 

[Rolf Latham]

nice

its not what u make, its what you do with it

ta
rolf

 

[nww]

Nothing wrong with $55000 a year, especially if you only work part time.

 

[Terry_w]

Its like that game cashflow. It is not how much you earn that determines how quick you can retire - but it helps!

 

[Trogdor]

What a crock.

Double all your numbers, a higher salary would help get you there .

Plenty of people on high incomes with investment and money management nous. You would be surpised that low income earners dont hold a monopoly on these skills.

If you are on a low salary one of the best inestments you can make is to upskill and increase your earnings, especially if you are young.

 

[Dazz]

Agreed Trogdor.

A story listed in Jan Somers 101 Book comes to mind, with the forklift driver, who on a low salary managed to grow a huge portfolio of property.

The story is only in the book because it is so rare and extraordinary.

There are many cases of people doing the same thing, but because they achieved it by working their @r$e off and subsequently received a high salary, their story isn't as remarkable.

 

[Fifth]

It can be done on a low salary but the higher the salary, the easier it is. With most properties being negatively geared, a low income earner hits a brickwall pretty quickly. Sure, there's regional and adding value, but it requires more money and effort to achieve CF+ here than in most other Western countries.

(Edit: I did not intend my post to come across so D&G-y. Point was, earning 60k pa in rents would require a fairly massive portfolio - much easier to build such a portfolio on a higher salary.)

 

[westminster]

I've been thinking about others lately, general employees to be precise and I've been looking at all my workmates. Some earn around $100k p/a PLUS company vehicle..! while I don't earn half that, most are still renting.. one has a few investment properties, some are paying a modest mortgage. While it can seem depressing earning a low wage at first glance, keep reading, this oughtta' cheer you up

Make '$55,000' gross a year thats pretty miserable isn't it..!
But that's not where it really ends. earn a further $60,000 in rents and instead of paying a larger amount in tax for the privelage, receive a tax refund to the tune of pretty well my entire tax outlay +$10,000. (or, pay no tax). But wait, there's more! On top of that, receive around 7% growth p/a across my entire investment portfolio.. (which isn't huge but it's pretty good for a low income earner) of around $120,000p/a. So tats a grand total of $255,000 a year. And instead of reducing that by 50% like any normal income earner, I don't pay tax on that until assetts are sold. They can be strategically deferred by choice, or not sold which are good options. Down-side is: My overheads, they sit at $74,000p/a (but still only about 35% on earnings for that year) Most of this is going into my mortgage,

People who earn $255,000 from a job are charged tax at a very high rate and lose around half of that, but us property investors are allowed a 50% CGT discount on any profits earned.. I have counted my home on the asset list because it does technically grow in value like the others and once paid off, provides a nice payrise. By that stage the IP's will be providing surplus cash and the figure will change for the better

I hope this helps cheer some other low income earner up
Bye

You've made your own pay rise which is excellent - keep going and you can be your own boss perhaps.
Not everyone is into IPs but with a good strategy and some sacrifices anyone can do it.
I wouldn't worry so much about others who could do it more easily but you have proven to yourself and others that you can do it on an average wage. Well done.

 

[china]

A really fascinating article about wealth accumulation

This article makes a few really good points about wealth and net worth.

The point I liked the most was at the very end: you cannot really amass great wealth from income and investments.

http://www2.ucsc.edu/whorulesamerica/power/investment_manager.html

Hard work and income from selling one's own labour and efforts can get some money for investing but not really achieve great wealth.

 

[Player]

This article makes a few really good points about wealth and net worth.

The point I liked the most was at the very end: you cannot really amass great wealth from income and investments.

http://www2.ucsc.edu/whorulesamerica/power/investment_manager.html

Hard work and income from selling one's own labour and efforts can get some money for investing but not really achieve great wealth.

This is a US-centric article and, assuming there is any validity and reliability to the numbers/amount$ reported, it is describing the largest (for now) consumer cohort in the world.

Furthermore, it appears that the description is from the perspective of a fund manager's desk (the author is a financial services investment manager). That doesn't necessarily augur for a client base who are independant in their investing decisions/vehicles, but rather those who have outsourced some or all of their investment decisions.

Anyone can amass wealth (even great wealth) from earned income and subsequently investments if they have some discipline and some time. Of course it won't happen in a heart-beat or an instant. The higher the income earned, the lower the time required to amass the capital growth/wealth from chosen vehicles of investment.

The more one earns, the more there is left to invest and grow wealth, should one choose to.

Can anyone do it? Of course.

Will everyone do it? Of course not.

 

[china]

This is a US-centric article and, assuming there is any validity and reliability to the numbers/amount$ reported, it is describing the largest (for now) consumer cohort in the world.

Furthermore, it appears that the description is from the perspective of a fund manager's desk (the author is a financial services investment manager). That doesn't necessarily augur for a client base who are independant in their investing decisions/vehicles, but rather those who have outsourced some or all of their investment decisions.

Anyone can amass wealth (even great wealth) from earned income and subsequently investments if they have some discipline and some time. Of course it won't happen in a heart-beat or an instant. The higher the income earned, the lower the time required to amass the capital growth/wealth from chosen vehicles of investment.

The more one earns, the more there is left to invest and grow wealth, should one choose to.

Can anyone do it? Of course.

Will everyone do it? Of course not.

The main point of the article is that the top 0.5% of the population in terms of net wealth, those with excess of 10 mil in net worth, did not get there via income from personal service and investment. That is, you can earn massive income and invest very smartly but according to this article, most likely you will be in the top 99.5%.

His point is that the top 0.5% are usually affiliated with the finance/banking sector in some way and have not derived income / wealth from human labour.

He gives good examples of how medical specialists and lawyers can get into the top 1% fairly easily but not the top 0.5%. In the authors' experience, these professional groups who derive income from their labour and invest will end up with between 3 to 10mil net worth, very rarely more.

I think there are lessons here for those who aspire to be in the top 0.5%

 

[wobbycarly]

The main point of the article is that the top 0.5% <of those measured> of the population in terms of net wealth, those with excess of 10 mil in net worth, did not get there via income from personal service and investment. That is, you can earn massive income and invest very smartly but according to this article, most likely you will be in the top 99.5%.

His point is that the top 0.5% are usually affiliated with the finance/banking sector in some way and have not derived income / wealth from human labour.

He gives good examples of how medical specialists and lawyers can get into the top 1% fairly easily but not the top 0.5%.

Does it matter whether one is in the top 1% or 0.5%? The difference here is all about ego, is it not?

In the authors' experience, these professional groups who derive income from their labour and invest will end up with between 3 to 10mil net worth, very rarely more.

I think there are lessons here for those who aspire to be in the top 0.5%

Or 1% or 5% or 10% - these are just arbitrary numbers!

 

[Rolf Latham]

Does it matter whether one is in the top 1% or 0.5%? The difference here is all about ego, is it not?


Or 1% or 5% or 10% - these are just arbitrary numbers!

yep !


but thats what a lot of society runs on .

Significance no longer matters as much........."success and results" do

One can bu hugely significant to human kind and be broke, but the financial yardstick is often more revered

ta
rolf

 

[china]

Does it matter whether one is in the top 1% or 0.5%? The difference here is all about ego, is it not?


Or 1% or 5% or 10% - these are just arbitrary numbers!

If you read the article, it will explain the huge differences between the top 1% versus the top 0.5%. I found the article very insightful into this matter.

 

[Ideo]

I'd be happy enough being in the top 1%, or top 5%.

I look at the personal cost involved in being extremely wealthy. And I'd prefer to be a happier person, giving more back to society, than just being obscenely wealthy but deeply unhappy.

 

[Aaron_C]

I look at the personal cost involved in being extremely wealthy. And I'd prefer to be a happier person, giving more back to society, than just being obscenely wealthy but deeply unhappy.

I am sure there are plenty of people in that top 0.5% who are both obscenely wealthy and just as happy as you and I. You just hear the stories of those which bicker since they are humans like the rest of us.

 

[Ideo]

I am sure there are plenty of people in that top 0.5% who are both obscenely wealthy and just as happy as you and I. You just hear the stories of those which bicker since they are humans like the rest of us.

Very true.

Perhaps more along the lines of having a decent balance between work and home life would be a better way of phrasing it.

My BiL works as investment banker in London. Earns amazing money, but also has to work regular 18 hour days. No real time to enjoy any of it.

But he'll probably retire long before me and enjoy more free time. Swings and roundabouts

 

[The Fence]

My BiL works as investment banker in London. Earns amazing money, but also has to work regular 18 hour days. No real time to enjoy any of it.

But he'll probably retire long before me and enjoy more free time. Swings and roundabouts

Unless he has an incident on the swing or roundabout and life ends with no real free time enjoyed.

That's the risk life balance.

 

[Terry_w]

Unless he has an incident on the swing or roundabout and life ends with no real free time enjoyed.

That's the risk life balance.

I know a man who lives over in the Eastern Suburbs. He is know to be a tight **** and is reluctant to go to a coffee shop to chat as he will have to buy a coffee. Drives an old car and dresses cheaply.

He has just divorced his wife and paid her out $1.5mil. It turns out he is worth considerable money.

He was complaining about being frugal all his life only to have had to give a large chunk of it all away.

 

[Aaron_C]

People who worry about small money never make big money.