Help me retire
I am 23 and a first time investor. I earn $480.00 per week and have $22,000.00 in savings. I want to retire early by building wealth. I would like to know what types of investments people are making with positive gearing strategies. I am willing to invest in anything, the only trouble is getting finance on a single income that is fairly low. Help me please!!!more info please…
At what age would you like to retire? and how much income per year do you want from your investments during your retirement?
cheers
JasonWow, you are a switched on young person!
You have the basics already – a job & and a great savings record. Well done[thumbsup2]
Next step I would suggest is to see a mortgage broker to establish how much you are able to borrow.
Building wealth in property usually requires a long term strategy as you are probably aware. Although its possible to make good money fairly easily during a boom.
I would recommend starting with residential property, and learning lots, before trying more high risk investments such as commercial property.
Positive cash flow properties may interest you and Steve McKight has his great books on that subject, if you haven’t already read them.
Purchasing for Capital Gains is another option (not necessarily +CF), and Peter Spann has an interesting book on that subject called: $10Million Property Portfolio in just 10 Years.
There are other great books on property investing, and I would suggest you read and learn all you can, and come to this forum often – its a great learning tool too.
Sorry to carry on about learning, learning, learning [blush2], but as you gain knowledge you will able to choose the type of property investments that you like and are most comfortable with, rather than just be willing to invest in anything.
Best wishes for an early retirement[biggrin]
Regards,Sharon
I agree with Sharon. If you want to retire via property, you should speak to someone who can tell you how much you can borrow. Once you know this, you can start to make realistic plans for your retirement.
Try this on…perhaps others can comment on this strategy and if it could work for you (or at least tell me i’m full of it & then you can at least eliminate this as a way to fund your early reitrement)….
if you wanted to retire in 7-10years, you would need around $700K (unencumbered) in 7-10years time. This $700K (earning an ave. of 7%p.a) could give you an income around $45K per year for around 40 years.
To get the $700K (unencumbered) you would need to buy around $950K of cash flow property in the next 12-24 months. this would take some doing I imagine. in theory, property doubles in value every 7-10 years, so in 7-10years time, you portfolio would be worth $1.9M or there abouts. You could then sell all properties (except 1 to live in – but for the purposes of the exercise, let’s say you sell them all). You would have around $950K capital gain, after paying out all mortgages. You would get 50% CGT discount. So, at highest tax bracket, you would pay around $230K in CGT, leaving you around $720K unencumbered.
This example actually assumes properties are cash flow neutral, so cash flow positive would improve the numbers.
If you like, you can run through some different scenarios yourself using the calculator on the link below (it’s free).
http://www.moneychimp.com/articles/volatility/montecarlo.htm
What do others think…
[thumbsup2] OR [thumbsdown2] …?????YEP, you could retire young with property.And I am certain that you will NOWORK because of your well developed goals and your youth.
I am not sure about your figure JASON – your figure of requiring 700,000 cash in 7-10 yrs time to retire on. Wouldn’t the inflation dragon burn some of that value between now and then? And what about from then until you retire?
$45k pa may not buy much in 30 years time. This bloke is only 23 I think.
Maybe have it all in rental properties, then you can adjust for infation as you go along.I wouldn’t like 700k in cash investments to give me my wage each year.The 45k would buy me 3% less each year(inflation).
regards GIDDO[cigar]Originally posted by JasonBourne:if you wanted to retire in 7-10years, you would need around $700K (unencumbered) in 7-10years time. This $700K (earning an ave. of 7%p.a) could give you an income around $45K per year for around 40 years.
To get the $700K (unencumbered) you would need to buy around $950K of cash flow property in the next 12-24 months. this would take some doing I imagine. in theory, property doubles in value every 7-10 years, so in 7-10years time, you portfolio would be worth $1.9M or there abouts. You could then sell all properties (except 1 to live in – but for the purposes of the exercise, let’s say you sell them all). You would have around $950K capital gain, after paying out all mortgages. You would get 50% CGT discount. So, at highest tax bracket, you would pay around $230K in CGT, leaving you around $720K unencumbered.
What do others think…
[thumbsup2] OR [thumbsdown2] …?????[thumbsdown2][thumbsdown2][thumbsdown2][thumbsdown2]
1) You assume a 100% CG in 7-10 years on property![lmao]
2) How much is purchasing power will that 45k have in 50 years? How may cans of Pal do you need to live off?
sorry nowork,
looks like plan A is a loser..[whip]
anyone got a plan B to help nowork retire early???
Plan B:
Part 1) Work hard, save hard (but don’t forget to enjoy the ride). You say you earn $480 per week – how can you increase this? Education? Promotion? Overtime?
Part 2) Ditch the mobile!
Part 3) Invest (as you said) in cashflow positive assets. Educate yourself to all your options. We are heading into unstable times with (IMNSHO) implications for property and shares. You have done well to save 22k, and it would be a shame to lose it. Make sure you are getting a good return on a large portion with low risk such as online savings (BankWest/ING etc), and once you have learnt all you can about a particular investment, place some of your eggs in its basket if you feel comfortable that it fits your risk profile and is fundamentally sound.
Part 4) Take your profits when you are either happy with your return on investment or are uneasy about the future.
Part 5) Challenge your assumptions. Challenge the advice you are given. What if?
Part 6) Consider a balanced portfolio. Balance does not equal mundane performance. You can still take overweight/underweight positions, but are guaranteed to buy low, sell high in every asset class you hold.
Part 7) Never take advice from internet forums. Everyone has a vested interest or bias[wink].That’s the way I’d go, anyhow.
F.Congratulations on being a lot more savvy than the average punter. I have a course that can help you achieve financial independence. Coincidently it requires an investment of $22’000. Don’t worry. You’ll make your money back in no time.
Regards Henry Kaye
Air goes in and out. Blood goes round and round. Any variation is a bad thing
Originally posted by shaztaz:Wow, you are a switched on young person!
You have the basics already – a job & and a great savings record. Well done[thumbsup2]
Next step I would suggest is to see a mortgage broker to establish how much you are able to borrow.
Building wealth in property usually requires a long term strategy as you are probably aware. Although its possible to make good money fairly easily during a boom.
I would recommend starting with residential property, and learning lots, before trying more high risk investments such as commercial property.
Positive cash flow properties may interest you and Steve McKight has his great books on that subject, if you haven’t already read them.
Purchasing for Capital Gains is another option (not necessarily +CF), and Peter Spann has an interesting book on that subject called: $10Million Property Portfolio in just 10 Years.
There are other great books on property investing, and I would suggest you read and learn all you can, and come to this forum often – its a great learning tool too.
Sorry to carry on about learning, learning, learning [blush2], but as you gain knowledge you will able to choose the type of property investments that you like and are most comfortable with, rather than just be willing to invest in anything.
Best wishes for an early retirement[biggrin]
Regards,Sharon
In reply to shaztaz’s reply, I have seen a mortgage broker and he said that I was eligible for a loan of $200,000.00 but only in certain areas of higher population and stature. Thanks to all for your insights. I will read each reply and take all suggestions onboard. The only problem is I have to grow more confidence and learn to take calculated risks. Thanks again.
Originally posted by nowork:In reply to shaztaz’s reply, I have seen a mortgage broker and he said that I was eligible for a loan of $200,000.00 but only in certain areas of higher population and stature. Thanks to all for your insights. I will read each reply and take all suggestions onboard. The only problem is I have to grow more confidence and learn to take calculated risks. Thanks again.
Bugger that mate. You’re at the top(sic) of the biggest asset bubble in history. It’s a world wide thing so don’t worry you’re not alone. Use the $200k to buy a car park in inner city Sydney. It will appreciate 10% each year no problem. If there is a crash don’t stress. You’ll only have at least 6 years of negative equity. You’ll be right. Don’t look at any history of bubbles or booms. Just look at the last 6 years. You know that the rules have changed.
I’d say good luck but you don’t need luck. You need the Rapture.
Torachan,
Did you miss my point about learning, learning, learning?
Nowork is obviously noidiot, don’t treat him/her as such. What is the purpose of such a condiscending reply?[angry2]
In your words…
It’s a world wide thing so don’t worry you’re not alone.
Suggest you ask someone who is investing in the U.S. or China at the moment, don’t think they would agree Torachan!!![blush2]
Good Karma to you,Sharon
Originally posted by shaztaz:“It’s a world wide thing so don’t worry you’re not alone.”
Suggest you ask someone who is investing in the U.S. or China at the moment, don’t think they would agreeI suggest you ask someone who is an economist and does not work for a major bank / real estate firm / media company. I think they would agree with Torachan that the current speculative bubble is a worldwide phenomenon encouraged by media hype, easy credit and ‘irrational exuberance’. Hell, even some media are forecasting gloom – (co?)incidentally the ones who don’t rely on RE advertising for revenue.[blink]
From the ‘States:
http://www.washingtonmonthly.com/features/2004/0404.wallace-wells.html
From the UK with Aussie references:
http://www.moneyweek.com/article/352/investing/property/global-house-prices-are-they-about-to-plummet.html
From the UK:
http://www.moneyweek.com/article/576/investing/property/signs-that-the-crash-is-coming.html
Regarding China:
http://www.marginalrevolution.com/marginalrevolution/2005/01/what_countries_.html
and
http://www.foreignaffairs.org/19940501faessay5107/richard-hornik/bursting-china-s-bubble.htmlI’m happy to post more links, or you could try some research for yourself using the following link:
http://www.google.comHope this is informative!
Cheers, F.[cap]Here’s some nuts & bolts, get your hands dirty, real life research you might be interested in…
http://www.somersoft.com/forums/showthread.php?t=18255&highlight=quiggles[offtopic] Lets get back to some constructive comments to assist nowork.
Sharon
Originally posted by shaztaz:Here’s some nuts & bolts, get your hands dirty, real life research you might be interested in…
http://www.somersoft.com/forums/showthread.php?t=18255&highlight=quigglesFrom:
http://www.somersoft.com/forums/showthread.php?t=18255&page=3&pp=15&highlight=quiggles
I read:Originally posted by quiggles:on 100% borrowings you could expect about 4% after tax.
I don’t think this is really going to help nowork is it? Less return than bank interest with more risk?
And besides, what’s with taking us [offtopic] and then trying to call ‘shenanigans’ on anyone who questions your incorrect statements?I do appreciate all of your help, but now i am starting to get a bit confused. I think I need to read more books and real estate listings. Would anybody be able to help me to find population rates for areas around Australia that are free. I have been looking but they all the sites I have been to want to rip people off.
Oh on another note has anybody read Robert Kiyosaki’s books or seen any of his conferences. I have read a few books of his and noticed he has some good strategies. Also are there any other good reads? (please note that yes I am currently reading both of Steve McKnights books – AGAIN!!!)
Nowork,
TRy this thread for some reading suggestions;
https://www.propertyinvesting.com/forum/topic/6845.htmlDerek
[email protected]Property investment advice and researched property in quality locations available.
$480 a wk gross or net ? Assume it is a gross figure then the bank will lend u abt 150k based on 80% lending. So ur total purcahse power is around 180k mark.
based on ur wage, there is nothin much benefit of negative gear, so it is best to look for a +CF prop, and good depreciation as a bonus.
If u buy something that self-funded and hold for long term then you wouldnt have to be too worry abt these bubble hype.Long term is the key, not speculation.
goodluck
You must be logged in to reply to this topic. If you don't have an account, you can register here.
