Hi, was wondering how many +ve cash flow properties I would need in order to retire by 40-45 (ie 15 years time). If I roughly assume my wife and I would spend 40K per year and save 10K per year would I need 5, 10 20 or what? i don’t quite know how to apporach it.
Any help would be much appreciated
Regards
anchHi,
Like wise i wish i knew the right amount of preoperties but as my new found bible steve mcknights new book has advised i set a goal that yeah is outrageous but is feasible and as you should do too, that is set your goal, then figure how much passive income you wish to earn, and then how many homes you need in the time frame there is no simple formula but i suggest invest in your education first i mean i am no master here but i do know that i ould rather read about peoples mistakes than discver my own mistakes so spend the 30 bucks and buy a book maybey rich dad poor dad something to get you going…. its got me motivated
Hi
it all depends on your requirements and your property profiles.
I mean if you need 50k to retire on and buy cheap properties returning $50 PW then
$50 pw = $2500 PA = 20 properties to get $50k PA
or
if you need $100k PA to retire but you look at more expensive properties retuning $200PW then
$200pw = $10k PA = 10 properties to get $100k PA.
so it not purely number of properties but +ve cashflow result.
hope this helps
rgds
Cobrathanks Joshwaly and cobra8272 for your advice and calculations.
I really need to find those cash flow positive properties!i have been learning about the 11 second rule to get 10.4%.
Does this rule only apply while interest rates are at current levels. I may be wrong, but when interest rates rise, won’t this affect the 11 second rule and the ability to get cashflow positive properties?Gday anch,
Steve has left us an important extra chapter on this website about what happens if/when interest rates go up.
its a good read and i suggest you have a look at it hope this helps.Powmow[
]Where do we find this extra chapter? I would like to read it myself
Steve and Dave outline a ‘no brainer’ 10 year retirement plan in their Wrap Secrets Revealed Kit which will see you retire on >$100k PA. I’ve also seen similar plans in books elsewhere.
A very basic overview (off the top of my head).
First 5 years
Purchase 1 property a quarter.Second 5 years
Reduce debtThe properties are based on $70k value, 10% deposit (which you will need to save) and positive returns of $50/week each. You will also need to re-invest your returns over the 10 years and continue to save the equivilent 10% deposits each quarter over the second 5 year period to put towards debt reduction.
My advice is to work out what you want to achieve and when you want to achieve it. From there spend a few months investigating different strategies to be a position to decide which strategy/s will best suit your current situation and personal qualities. There are no standard templates to success which will suit everyones personalities and current situations.
Cheers, Leigh
“If you can count your money, you don’t have a billion dollars”
J. Paul Gettyleigh, you beat me to it!!
I call it the ‘dave model’ and when i read it, i thought, gee, that’s simple, even I can understand it. i’m not going to reinvent the wheel, I’m going to follow it exactly!! I had enough to get the first three freehold, and then fourth one i’m going to start leveraging. i figure i should be able to stay well within 70 percent if not more equity throughout the whole time. i think the magic is when over time the rents get more and more but the debt gets less and less and starts to get paid off more and more quickly.
cheers-
miniwow, retire in ten years. thanks Leigh. I’ll have to lok into it. I have so much to learn but feel I am getting on the right track. Thanks to you all!
anch
Jan Somers, in her book Building Wealth in Changing Times, she shows you how much in assets you need if you want to retire today. There is a whole chapter on retirement and how to plan for it, I recommend reading it. Then you can adapt it to your own preferred strategy.
Just doing some basic maths here – feel free to correct me…
buy 1 property per quarter for 5 years. Figures worked on each property being $70k with your provided 10% deposit. That’s $28,000 per year in savings. That would be hard to achieve as a single person and even harder as a single parent.
Wouldn’t you need to be looking at a take home income of around $50,000 pa to be able to do this. I’m assuming that the rents received on these properties is going back into the mortgage or are you pulling cash from there to bring up your deposits.
I’ll admit right up front to being blonde and extremely grateful that it is Friday because I really need to go home and sleep.
Hey Kelly100 – I’m not blonde and I still had the same question? Where do you get the $28K per year for the deposits?????
LR[?]Powmow, you said
‘Steve has left us an important extra chapter on this website about what happens if/when interest rates go up.
its a good read and i suggest you have a look at it hope this helps.’I’m not quite sure where it is. Could you please advise?
Hi kelly 100 and castle dreamer. I guess you are right, not everyone can follow the 10 year plan at that pace. Leigh mentioned it is designed to give over 100K a year. Personally, 50K would be sufficient, so buying one per half instead of per quarter will do it. Worth investigating!
/I’m Wearing my Property is only 1 way, hat today
Ive been into property for a year and a half as a facilitator to wealth. (edit: for me – i dont run seminars)
Ive been thinking (~well maybe procrastinating)
in NZ quote: 84% of enterprises employ 5 or fewer full-time people. 96% employ less than 20. Yet these enterprises account for 39% of the nation’s GDP
Every time you think something is stupid – ie done wrong, or why doesnt someone do X…
Its a business idea.And like Property, you might have to follow the 100:10:3:1 dolf dee roos analysis (ie 1 out of 100 you will actually action.
BUT
Anyone that has seen the workings of a good business, It blows Property away. You arent relying on the market to provide capital gains.
if you have a good product/market, service and support you will reap HUGE rewards.Im not saying property is arse. Im saying there are multiple weapons for wealth. ( diversification)
Its not too difficult to come up with a part time business that can bring in $3000 per year for minimal effort.
then times that by X small easy ideas.. not a figure to laugh at. (or medium effort: x * infinity )
An idea, and feedback welcomed.
Shares is one area I have no idea on. Im thoroughy interested in the IPO of 42below ( http://www.42below.co.nz ) because they have no manufacturing assets, its all marketing /outsourcing. etc. I hope doogs/crashyy jump in here)Actually (this may need to be moved to ‘non specifically property) although it is a discussion of the alternatives. ie relevant.
/long long rant off.
Craig
NZ Property Investing News
http://www.Landlords.co.nzhi all.
http://www.Landlords.co.nz, you are right, property is not the only way, it is just one vehicle. ANd it is one I am still learning to drive!https://www.propertyinvesting.com/freestuff
This is the free stuff on the website.
ChrisAll post are IMHO.
hi all,
thanks Chris Syd,
I checked out the free stuff. A bit dated but helpful.
By the way, what’s IMHO?
IMHO = in my humble opinion
BTW = by the wayhope this helps
rgds
CobraIf you look in the 0-130 Forum, Steve has posted a topic called bonus chapter with a link to it.
Cheers
Mel
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