Why does everyone want to retire at 40? What does one do then? I seem to hear and read it a lot. Especially from 20-somethings. I work, I love what I do. I am not trapped, but I not think that heavily gearing into property will accelerate future planning. Whilst I do not want to work till I am 75 or anything, I can't see the point of retiring too early unless you have something else to do.
My personal interpretation is that what people mean is that they want to be financially independant by 40 ( in other words, if I stop working today, how much income would I continue to recieve? Or re-worded, how long could I survive for if I stopped work and only lived off passive income only. If you had several positively geared properties getting, say $50k/year net after all expenses then you are sort of financially independant. A bit more would be better of course. Only problem I can see is you can't borrow as easily because you don't have a job.
People who retire with nothing to do often seem to shrivel up and die. You need something to do or you get bored and go batty.
I believe there are a few Great Australian Dreams.
1. is to get a redundancy package
2 Own your own home
3. retire at 40 (if you don't get 1, and if 2 isn't forcing you to work till you're 75)
4 give your kids what you never had (most of the time this equates to having a parent up to their eyeballs in debt!)
I would go differently and say that it is better is to
1. have someone to love
2 have something to do
3 have something to plan/dream/look forward to for ( and this is where the whole financial/investing in IPs comes in)
4have memories to cherish.
I see retiring early only works if you can continue to fulfill all of these.
Thoughts?
House Call wrote:My personal interpretation is that what people mean is that they want to be financially independant by 40…
I would go differently and say that it is better is to
1. have someone to love
2 have something to do
3 have something to plan/dream/look forward to for ( and this is where the whole financial/investing in IPs comes in)
4have memories to cherish…
That is what people generally mean by 'retiring'. Simply not having to work for money but work because one wants to.
Yup. Being financially free is really only worth if one gets those four things above.
Regards
Daniel Lee
My ultimate goal was to retire at 40 — since retiring I now have 2.5 children age 3, 1 and another one on the way. I use to work 80-100 hours a week on my own business. Luckily I managed to buy 12 Investment properties that I purchased over the past 20 years. Only 3 of my IP are positive cash flow, the others are prime beachfront and harbour front apartments that gives me awesome CAPITAL GROWTH. I manage all my places myself which keeps me fairly busy. What I have learnt is that you can have all the money in the world, but no time (hence when I worked my business), or you can have all the time and no money (retiring on the pension). I like the balance of all the time and all the money. TIME is my rich! I love being able to pick up and drop off my child at day care, go camping whenever we want to, do whatever we want when ever we want, go overseas whenever we want, go on holidays whenever we want. Retiring does not mean doing nothing, it means doing the things that you enjoy in life. If you enjoy your work then essentially that's your retirement. Mine is travelling and watching my children grow up. I invested heavily in real estate and still am, but there is something I believed that has worked for me and that is when buying real estate the most important aspect is LOCATION, LOCATION, LOCATION. I purchased in prime spots in Sydney and yes while my cashflow is not always positive (a property I purchased 21 years ago is just neutral now – oh it will be negative after todays interest rate increase) I have managed to re-finance properties and put this money into an account and live off the equity. Also, you can borrow money but only as a low doc borrower.
I used to stir my Dad up by telling him that retirement is spending the afternoon wondering what to watch on TV in the evening so you have got something to think about in the morning.
My dad worked his butt off all his life for the Government (Dept of main roads) and retired at 60 with $232K payment. He went on a 3 mth overseas holiday, came home and got cancer. Died 15 mths later. No wonder people want to retire at 40!
Not everyone out there loves what they do, or the job they have. I'm one of those people. Yes, I'm thankful to have a job and to be able to see a paycheck every month, but work takes up 75% of my waking hours. And no, I don't like my work!
To me, retiring is not about doing nothing. 'Retirement' means to be able to work like you don't need the money, to be able to work 2-3 days a week so that things don't 'pile up'…to have the time to find this thing called 'happiness'.
Money doesn't buy 'happiness'. But you need money to buy you time, so that you can actually look for 'happiness', if you get what I mean. To me, working day after day for a paycheck and feeling that your debt will eat you alive if you ever get fired is no way to live a life. 'Retiring' would no doubt free up time to do the things you want, go on a few dream vacations, spend time with people who matter most to you.
What about those dreams you had as a kid? Perhaps it would then be appropriate to actually make it real? Do charity work, chase your favourite hobby, dance naked on the street…talk with your spouse, your kids, walk the dog, whatever! To me, the thought of being able to wake up to the sound of waves and the smell of a sea breeze, the glorious sun and not having to force myself out of bed is a thought that gets me salivating mentally.
It's better than dressing up in the mornings, downing breakfast in 6 minutes, leaving the house when its dark, gritting your teeth amid the morning traffic jam, dealing with clients (and in a few cases, their associated demands and difficulties) ALL DAY, and then coming home…when its dark, and then eating dinner before you slump on the couch and then catch your 5-6 hours of troubled sleep.
Free time versus working for your life. I know which one to pick.
My mum worked right up until the age of 55, retired with kidney failure, spent the next six years on dialysis three days a week and died at the age of 61. i don't want to live the same wokr focussed 'life'. I want to be able to choose what to spend my time on and who to spend it with.
By he way, i am already over 40, hopefully i can retire at 50!
Wealth gives you the opportunity to work because you want to, not because you have to. I recently turned 50 and assumed I'd keep working as a nurse, by choice, till I was 65. However recent changes in the area I work in now have me wishing I could quit tomorrow! Sadly my current financial position doesn't allow this (how I wish I'd increased my number of IP's over the last couple of years) and I see myself still working till 55 when positive CF from my IP's and my super (God bless the CSS!) will make this possible. The point being that financial independance means you are no longer at the mercy of the whims of your employer.
I'm one of those 20 somethings and I have no intention to retire ever. Not sure if many people fell the same (definitely a minority, if there are others) but I agree with House Call's statement that people want to be financially independant and are confusing the terms. When I'm 40 I would like to be completely financially independant but I'll still work a job (p/t or f/t) or run a business or something that is actively making money. In fact I would like that now.
Reaching over 40 I find that employers do not employ older workers rather they employ younger workers so I wish I to had kept working as I haven't worked for 9 years through looking after my children and wasting my time at university .
But how many men can say they helped raise their two kids and watched them grow from birth.
I can't put a price to that !
Retirement to me is not having to going cap in hand to an employer ever !House Call wrote:Why does everyone want to retire at 40? What does one do then? I seem to hear and read it a lot. Especially from 20-somethings. I work, I love what I do. I am not trapped, but I not think that heavily gearing into property will accelerate future planning. Whilst I do not want to work till I am 75 or anything, I can't see the point of retiring too early unless you have something else to do.My personal interpretation is that what people mean is that they want to be financially independant by 40 ( in other words, if I stop working today, how much income would I continue to recieve? Or re-worded, how long could I survive for if I stopped work and only lived off passive income only. If you had several positively geared properties getting, say $50k/year net after all expenses then you are sort of financially independant. A bit more would be better of course. Only problem I can see is you can't borrow as easily because you don't have a job.
People who retire with nothing to do often seem to shrivel up and die. You need something to do or you get bored and go batty.
I believe there are a few Great Australian Dreams.
1. is to get a redundancy package
2 Own your own home
3. retire at 40 (if you don't get 1, and if 2 isn't forcing you to work till you're 75)
4 give your kids what you never had (most of the time this equates to having a parent up to their eyeballs in debt!)
I would go differently and say that it is better is to
1. have someone to love
2 have something to do
3 have something to plan/dream/look forward to for ( and this is where the whole financial/investing in IPs comes in)
4have memories to cherish.
I see retiring early only works if you can continue to fulfill all of these.
Thoughts?
I guess everyone has differnt goals and aspirations.
If we look at the underlying factor, people have a drive to retire at 4o, is it to spend time with kids? is it to travel, is it to play jet skis, everyones end goal is different, the freedom part is the talked about part because everyone wants the freedom to carry out their end goal.
I'm 40, I love my job.
I've been investing in property for 17 years. My goal was to go part-time at 40, which I have done. My goal is to have the option of retiring from paid employment at 45. Unless the conditions in my job change too much I will keep working as long as I desire. Let's face it, it is very hard to get rich by working for an Employer. You are selling your precious time to them. Time is one of the few things that we truelly own. How much is your time worth? You just never know what is around the corner. I had trouble selling my properties to free myself. I had the mentality of trying to keep hold of everything, even when I was on unpaid maternity leave for 2 years. I ended up selling two properties when on unpaid mat leave. You can't put a price on watching your child grow up. I have just about sold all of my properties, one to go and then I will concentrate on more developing but with a lot less debt. I read Steve's book again to get my head around the fact that selling is not bad and now the more I sell the better I feel.
Real Estate has allowed me to free up my time and bfree2live, which is what I'm all about. I think retirement is about being able to have options in your life. Work if you want to, go on a 3 month holiday if you want to, raise your child, etc, etc.
Good luck to everybody trying to get off the hamster wheel of paid employment.
Well, at 24 years old, i have not put a time limit or age on when i want to quit 'solving someone elses problems' – ie working for someone else.
I am sitting in my loungeroom today home sick from my full time job which takes 60 hours of my week. in the last 2 weeks i have travelled to SA and QLD for work and have read from cover to cover, both of Steve's books on those 90 – 120 minute each way flights.
So i have invested roughly 4 – 5 hours in my future through and through this self education, i have realised that even though i worked my behind off when i was 21 – 23 years old, working 2 jobs, buying my first house, completing a degree and a diploma within that time and then landing my 'dream job' – i am still not happy. I have made it to the 'top', to my goal that i set for myself 3 years ago – in regards to salary and also my job title. I cannot go any higher within my department at my current company who employs over 700 people nationally. I had a moment when reading Steve's books: that i have wasted 3 years of my life to get to the top and still not be happy. This is because i am still working day in day out to cover my living expenses and my capacity to earn can only increase by about another $20k per year – capped at about $100k a year in my industry. And i still have to get out of bed at 7am – something i LOATHE. And the higher i go, the more i stressed i am.
I look around at all my friends and people i went to school with and most of them are stuck in their jobs, havent got sufficient savings to buy a house, or if they have bought a house, it was when the FHOG was here and they are now up to their eyeballs and cannot start a family…
So inconclusion:
here are my 'loose' dreams:
– To work smarter, not harder
– To seize the opportunities available to me
And here are my particular dreams:
– to get out of Sydney and hopefully live near Port Macquarie on about 5 acres but still only 10 minutes from the beach. On those acres, i want a dam for my labradors to swim in. I have 2 labs, i want to rescue about 6 more from RSPCA's and animal rescues
– I want enough IP's to be able to buy and sell when needed – in the ups and downs of the market – and they need to generate a minimum weekly income to live off
– i want to volunteer at the guide dogs association or raise a guide dog myself
– i want to play tennis and soccer for as long as my body will allow and whenever i feel like it!Hope this was an interesting read!
Amanda
If your 30 and you want to retire at 40, property on its own just wont do it for you, unless you have the capital to go out and buy 15 places very quickly.
I saw this many years ago, and as a result started my own business. I can tell you from experiece the true way to financial freedom is working for yourself.
Cash flow as many of you will know is key…property just cant provide that.
JamesSampson wrote:If your 30 and you want to retire at 40, property on its own just wont do it for you, unless you have the capital to go out and buy 15 places very quickly.I saw this many years ago, and as a result started my own business. I can tell you from experiece the true way to financial freedom is working for yourself.
Cash flow as many of you will know is key…property just cant provide that.
Hate to disagree …, but I disagree.My husband and I started investing in property early in 2004, using firstly Steve McKnight's strategy and then adapting it to suit what we wanted to achieve. I never went back to work after going on maternity leave in late 2004 and my husband stopped working for his employer at the end of 2006. We stopped being employees at the age of 34.
We now control a multi million dollar portfolio and have our own property development company. I "work" two days a week doing all the paperwork and my husband works about 5 hours a week chasing up the more technical aspects of our developments.
While the market has changed since 2004 there are still plenty of opportunities in property. Property gave us the freedom to work for ourselves as well as cashflow. It took us 3 years to get there and have been "there" for 4 years now and still full steam ahead.
I get to take my daughter to school every day and sit in her class and read with her and the other kids. I know every child in her class. I get to crawl around on the ground with my three year old boy, playing "tractors". A couple of months ago, I took my 8 month old son to Europe for three weeks and spent the whole time with him in a backpack right next to me. We slept together, ate at cafe's together and explored Europe together. What third child gets that sort of attention? My husband spends his days on our farm building things, growing things and hunting things. Oh, and he spends more time playing LEGO than any adult should!
Property – it will set you free.
Cheers
K
Thankyou Linar, inspiring read.
This is just what I needed. I am quite new to this site, but have never posted. I have been viewing many threads (thankyou to all – your knowledge is invaluable) and reading all the literature that I can get my hands on, but sometimes hearing an 'I did it' story is all you need to motivate and provide you with hope that you too 'can do it'.
Retiring at 40 is not one of my goals, but achieving financial freedom soon after is. I have been busily saving for my first IP and I am nearly bursting out of my skin just to be a part of it. I'm now 36 and have to say to myself daily 'it's never too late to start!'
Cheers again to all those I am learning from
Property has made me financially free! I grew up in the outer suburbs in Sydney with no cash behind me and I was on a PAYG income as a teacher. My Wealth was not created from my income or a wealthy up-bringing. Clearly, property investments accounted for my retirement at 34 years (or semi-retirement as most people point out). Now-a-days, work plays a role in my life, it defines me personally- I enjoy the thrill of helping and teaching. Financial freedom allows choices in relation to work, i.e. for the next 3 months I will work less and train to compete in Canberra Half Ironman (triathlon) and ski a little.
I am not denying that a business can contribute to wealth (I see many people with this pedigree), but a stable income and an astute mind-set is all that is required.
Easy. Because you're old enough to say you've probably seen too much….and young enough to say you'd do it all again
Linar wrote:JamesSampson wrote:If your 30 and you want to retire at 40, property on its own just wont do it for you, unless you have the capital to go out and buy 15 places very quickly.I saw this many years ago, and as a result started my own business. I can tell you from experiece the true way to financial freedom is working for yourself.
Cash flow as many of you will know is key…property just cant provide that.
Hate to disagree …, but I disagree.My husband and I started investing in property early in 2004, using firstly Steve McKnight's strategy and then adapting it to suit what we wanted to achieve. I never went back to work after going on maternity leave in late 2004 and my husband stopped working for his employer at the end of 2006. We stopped being employees at the age of 34.
We now control a multi million dollar portfolio and have our own property development company. I "work" two days a week doing all the paperwork and my husband works about 5 hours a week chasing up the more technical aspects of our developments.
While the market has changed since 2004 there are still plenty of opportunities in property. Property gave us the freedom to work for ourselves as well as cashflow. It took us 3 years to get there and have been "there" for 4 years now and still full steam ahead.
I get to take my daughter to school every day and sit in her class and read with her and the other kids. I know every child in her class. I get to crawl around on the ground with my three year old boy, playing "tractors". A couple of months ago, I took my 8 month old son to Europe for three weeks and spent the whole time with him in a backpack right next to me. We slept together, ate at cafe's together and explored Europe together. What third child gets that sort of attention? My husband spends his days on our farm building things, growing things and hunting things. Oh, and he spends more time playing LEGO than any adult should!
Property – it will set you free.
Cheers
K
That is a real success story. You now have a property development business, which goes back to my point property investing alone as an employee cant provide the cash flow you need to expand quickly.
It is the business model you use that is very important to cash flow and tax savings.
Hi James
We could have used property investing alone to provide cashflow. We had close to 20 properties at one stage, all positively geared and we could have lived off the rents, which were skyrocketing in the area that we invested.
But we liked are both far too young to retire properly and made the decision to sell the properties and throw the money into development, a decision that we don't regret at all.
I don't think you could do what we did in such a short timeframe these days because the market has changed so much. But certainly, if you choose wisely, you can build a successful portfolio that will give you passive income.
K
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