You "Only" Need $1m to retire comfortably.
- Thread starter Cassandra
- Start date
Slightly off topic.
Do you know if that $75K is per person or family? For eg. in SMSF with husband and wife do they pay tax at $75K income or is the threshold $150K?
Cheers,
Oracle.
It is a bit of topic. However, if it is brought into affect it will effect people's plans. The articles don't seem to say whether it is for a family unit or for individuals. A few people on here have been saying they want $100k/annum if the tax comes in they will need to earn $105k/annum before tax. Not a huge deal as it is only an extra $100/week in earnings.
On the original topic though, yes, $55k per year in the hand is heaps. considering my wife and I pay $30k/year rent and about $10k/year in work related expenses that are non-deductible.
The rent and a lot of the work related expenses comes out of after tax dollars. So braking this down we would need 55k+30k+10k= $95 000 in post tax income. This equates to $136 000 before tax. Which is a very good income for 2 people.
On the original topic though, yes, $55k per year in the hand is heaps. considering my wife and I pay $30k/year rent and about $10k/year in work related expenses that are non-deductible.
The rent and a lot of the work related expenses comes out of after tax dollars. So braking this down we would need 55k+30k+10k= $95 000 in post tax income. This equates to $136 000 before tax. Which is a very good income for 2 people.
It's only $1.94 trillion. I don't see how that could be tempting...
In the future, or probably now, there are retired people who have spent their lives working and paying tax and now they are living off the money they saved (super) and also other investments (shares, real estate). Is it fair to tax someone who has paid tax all their lives and have now retired? If so, what should be the income level at which tax starts?
I know the budget has a structural deficit. The government spends more than they get in income. Their choice is to cut spending, increase revenue or both. The problem is that none of these are popular options. When you are governing to the polls, you don't make unpopular decisions.
Agreed. I spent 950k on a portfolio of shares, just two shares, which is now worth about 800k. However, in the past twelve months, the dividend payout was about 40k net, not including franking credits. So this beats the age pension and the same unleveraged 950k spent on two residential properties as a means of generating passive income.
I don't think anyone could really call a portfolio of two shares , diversified ,nor does it mean something different to you ?
So from 950 to 800 and an income of 40 , so that's a loss of 110 k , in 12 months .... And I thought the share market had gone up in the last year ....
If that's your example of retirement planning China , I hope you have a bit more stoked away .
We bought 18 properties in the last cycle and have only kept 4 . A block of four units in Hobart . Paid 220 in 2003 . Rent then was around 440 . Rent now is up to 900 / week . Rent keeps on going up . We've just spent 2 k tarting up a one bedder in the block and it rented straight away for an increased rent of 40/ week
In the current cycle starting in 2009 we've bought 8 more IP's and bought and sold PPOR's . Capital growth last year was over 1 mill and this cycle's only just started
As I've said before i really do wonder why you spend so much time here when I've never seen any indication of change .
Unlevaraged property ... At the end that's my aim . But I'm leveraging like hell on the way . Makes the trip quicker .
Cliff
Catchy tune.....thanks for the link.
I'd be curious to know which two if you don't mind sharing.
If I'm not mistaken I think China's point was that daily share price doesn't matter, whereas dividends are pretty much guaranteed.
See my post for an example I worked through for AFI (a listed investment company holding a diversified portfolio of shares):
http://somersoft.com/forums/showpost.php?p=1303701&postcount=102
Not always ,if one goes back 25 years there would be several companies from the start of the 1990's that no longer exists,Bondy-Skase- the list is quite long.. these 2==WOW==BHP would have lost 150k on face 950k entry exit yesterday value.
China's a stickler for detail . So am I .
I'm not disputing that money can't be made from shares . I think China's example was not a good example and certainly not an example of a diversified portfolio , which was what he was agreeing with . I think my comments were valid .
I'm sure China is capable of speaking for himself if he's so inclined
So a loss of 110 over a year isn't important ? At what stage does it become important ?
I know several people who's retirement plans were crucified by the GFC's effect on share prices while our super funds went up in that year and have continued to do so by avoiding the share market.
I do know people who do consistently well from the stock market , though once they've made their money , most park it in properties .
They're able to live on the north shore and send their kids to private school which is where I've met them as parents .
How do they make money consistently from shares ?
They're brokers ....
Cliff
You've just committed the first Cardinal sin of any one seeking to justify investing in shares . That of back testing and assuming that similar results will continue in the future and it's something that everyone who is serious about shares has to learn for themselves .
I've spent considerable more time researching share investing than I have property investing , yet am yet to make any money , while my return on property has been in the millions .
What willair alluded to is survivorship bias . Even as recently as 2007 many of the shares you could have bought no longer exist . They just wouldn't show up on the charts /'table when you were looking for an example . What would have happened to your 1 mill if you'd bought one of those in 2007
Even so called balanced funds can be run incompetently . They still rely of people to run them .
Many people on the forum put their faith in an experienced funds manager in the last cycle and that debacle is yet to be played out in courts with many people loosing significant amounts of money .
Cliff
dajackal , BTW I'm yet to hear a property investing equivalent of one of the most common jokes I've heard about share investing , though please correct me if I'm mistaken....
How do you make a small fortune on the share market ?
Start with a large one ...
Cliff
How do you make a small fortune on the share market ?
Start with a large one ...
Cliff
WOW and BHP are my two main holdings acquired in the past year. Despite the substantial paper loss, I am thankful that they have paid out a reasonable dividend and feel that I am on track towards a passive income of 100k for retirement purposes, without any major effort incurred. Essentially, if a 4% yield can be maintained from shares, regardless of the fluctuating capital value, then the passive indexed income necessary for retirement can be maintained. However, over time, I will intend to move from direct share holdings to exchange traded funds such as VAS as I think this will lower risk and generate more consistent income. I am trying out these strategies in the final few years of work/active income production.
Agree-I don't have the cojones to make my fortunes from shares. That's where property comes in and has served me well since I started investing in IPs back in 2007.
I am looking to shares to provide me with a tax-advantaged income stream so I can quit the rat race 10 years sooner than if I took a LOR strategy.
To answer OP-yes $1m in dividend paying shares would be enough for me to consider retiring.
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Reminds me of what an entrepreneur who invested in dna sequencing said during an interview, something along the lines of "I made my million the fast way, by making my way down from 100 million."
