yes it was possible in the past to find great properties close to our cities that provided a positive cash flow. This all seemed to dry up by 2006. Positive geared properties today are usually found in the morgage belt or in regional areas. Areas where i dont personally invest.
Because the majority of quality property is now negativly geared, you can wait 1-5 years before you see a neutral cash flow position. it just is not possible to accumulate 20 properties in a few years in todays enviroment due to stricter lending, higher LVR ratio and most properties will be negatlivly geared.
Thats when you create you own business, until we see positive geared properties coming onto the market again. (that wont be for many years)
Hi James,
A couple of questions:
1. What is your business?
2. What is the business you would suggest for the many viewers on this site?
JamesSampson wrote:yes it was possible in the past to find great properties close to our cities that provided a positive cash flow. This all seemed to dry up by 2006. Positive geared properties today are usually found in the morgage belt or in regional areas. Areas where i dont personally invest.Because the majority of quality property is now negativly geared, you can wait 1-5 years before you see a neutral cash flow position. it just is not possible to accumulate 20 properties in a few years in todays enviroment due to stricter lending, higher LVR ratio and most properties will be negatlivly geared.
Thats when you create you own business, until we see positive geared properties coming onto the market again. (that wont be for many years)
It was possible in the past and it is still possible, all my properties are cashflow positive, either by buying them positively geared or turning them positive within the matter of weeks/months.
I have owned businesses which have made me money and I own property that has made me money,
And no I don't live in a regional town, I only buy in cities.Thanks all for the posts. It is an interesting read.
As for me, being in my early 30s, I want to retire from a 9-5 job as soon as I am financially able. My aim is to achieve that by age 40.
Life is too short and we might as well enjoy it with what matters most.very true, to give your best years of your life working for someone else is not financially smart.
I just follow what most wealthy people in Australia do, use constant cash flow from a business to buy real estate and other assets such as commodities and shares.
Even though property is one of the best classes to invest in, I still wouldn't sleep well at night knowing i was 100% invested in property.
Its just that early retirement is much better than to retire at 60. At least at 40 you can still enjoy much more in life.
"Hi James,
A couple of questions:
1. What is your business?
2. What is the business you would suggest for the many viewers on this site?"
Becuase starting a business can be quite risky i sugest you start small while keeping a day job. A online business is great, for example i own part of a company that delivers flowers that are ordered online australia wide. Anything can be sold online so think about what strengths and passions you have and see if there is a market to sell those products over the web.
Start up costs are minimal compared to brick and mortar companies and you can run it in your spare time while you build your customer base.
i think this retirement at 40 has to do with the saying that life begins at 40…kiddin'. Maybe because in reality, people wanted to enjoy their life when they are still young. You can't enjoy that much when your knees are already wobbly and your eyesight is feeling. I mean when you retire at 40, you can do a lot of things compared to when you'll retire at the age of 60 or older than that.
i dont understand, why the hell would anyone not want to retire at 40?
People work their whole lives, put their career first, just so that when they have a family they can provide for them in a way that will allow them to live a comfortable life.
If i could have retired at 40, i would have. I would have remained active and used mu money in other endeavours but i certainly wouldnt have been working the usual hours.
I guess if i didnt have a family then work would probably be my life, so i understand the need to ask the question, but 40 coes so quick, and if you dont need to work, then why would you?Been there and done it and as has been raised if you are not careful you can get bored very quickly.
I have travelled extensively around the World so choice and working when you want to or the flexibility of not having to panic about money can be a real motivator for many.
Rather than go into depth about some of the pluses and minuses you can read the sorty in the August edition of API (email me if you really want a copy on PDF).
As for borrowing i can still borrow as much today as i could when i was working full time so rental income is perfectly acceptable to lenders as long as your equity position is good. Lodoc style loans are definately not required.
Richard Taylor | Australia's leading private lender
Firstly I am also new to this forum and would first like to say thankyou to every one who contributes good bad or ugly because i learn something new every time i read any post on this site even if it is just how some peoples views differ on a issue.
I am another of the 20 somethings (22 y/o) and i aspire to and i am currently working towards retiring at 35, i have watched my whole life as my dad slaved away at his job consistantly being the leading salesman in his company year after year and commended on his efforts working for the man. He is now 62 and still working full time not by choice but because he still dosnt own hes own home.
Admitidadly he has given everything for us kids ( myself, 2 brothers and 1 sister) and if he had invested instead of spend he might be in a different position.My main motivation in investing is to not have to work past 35y/o and be around to see my kids grow up being able to do anything that my kids want to do with me there to see it.
I dont see why anyone would willingly still be working any longer than the have to unless they love what they do.
I personaly have one of the most secure jobs in the country and infact would have to try extreemly hard to get myself fired even then they would probly still keep me but i cant wait till the day i 'retire' and dont have to listen to someone elses ideas of why i should be working and making them rich/look good.
Basicaly why work when i could live the same or better lifestyle and have the freedom to chose what, when and where i spend my time doing whatever i please instead of being chained to a job.
just my two cents
Wal
great thread,
i think "retiring" has a different meaning to different people. when i was 10 i thought retiring meant you got a hundred dollars a week from the govt and babysitted your grandkids while the parents worked, and sat in ur dressing gown watching pro wrestling with them and slept in seperate beds from your husband because he snored! (my grandparents and i)
at 18 i thought retiring meant you had saved enough money to pay your mortgage till you died. the schooling system teaches nothing about financial stability, wealth creation, or life in general!
at 23, i now believe retirement simply means being at a point where one can work if they want, but dont neccesarily have to. retirement to me is having the freedom to choose. something i'd like to before 40 please!
awesome thread
Ben
I was at morning tea today talking with 4 ladies in their 50s. One mentioned a desire to buy another house and talk turned to mortgages. All, at some point in the discussion, said the words “I don’t know how I will ever be able to afford to retire”. Now as I am very close to 40 the thought of retiring at 40 is an impossibility but I NEVER want to be in my 50s and saying “I don’t know how I will ever be able to afford to retire”. I think it isn’t that people necessarily want to give up work completely but they don’t want to be in the position where they have no alternative. I know my husband dreams of spending 6 mths a year fishing in various streams around the world, if you work full time until you are 65 (or more) when will you get to follow your dreams?
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.- Why does everyone want to retire at 40? I think the answer to this question is obvious, not everyone wants to retire at 40, but for those that do, they probably have different reasons
- What does one do then? Well it depends on the person, but most will try to enjoy life, whether it is spending more time with family and children, or pursuing other activities they enjoy such as traveling, gardening etc
- I'm glad you love what you do and that you do not feel trapped. When you love what you do it no longer becomes work
- To me the idea of 'retiring' and not doing anything is absurd. I want to be as productive as possible until the very end
House Call wrote: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.- If you word it that way, then 'yes' I would like to be 'financially independent', but 'no' I never want to retire
- My goal however is to achieve this a lot sooner i.e. before I turn 30
House Call wrote: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.- You are absolutely right. Retiring with nothing or a lower standard of living, is not something to really look forward to, which is why its so important for everyone to take control of their finances
House Call wrote: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!)
- 'Yes' the majority of the population value 'security' the most
House Call wrote:I would go differently and say that it is better is to1. 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.
- There's no reason why you can't have be financially independent and still have all of the above
- Having money and time is likely to enrich your relationships, expand your opportunities, and improve your lifestyle
kong71286 wrote:- There's no reason why you can't have be financially independent and still have all of the above
- Having money and time is likely to enrich your relationships, expand your opportunities, and improve your lifestyle
Good call kong71286. When I started this thread it was intrigued by the recurrent theme that seems to run through many investment/financial planning books and magazine articles that ask the question "how much do you want to live on when you retire?".
Everything in the financial planning arguments seems to revolve around retirement. Attached to that are the arguments about how bad the pension is and how many retirees there will be in the next 20-30years. It then fascinates me that running alongside the doom and gloom of those statistics (eg one taxpayer supporting 3 retired pensioners in the future) is the concept of not only NOT needing the pension because of good financial planning enabling financial independance, but in fact AIMING at retiring early as well. That is a paradigm shift from the era of our forefathers, for whom a hard work ethic and retiring at 65 in a blaze of glory was the expectation and the norm.
And it is that theme of aiming to retire early that motivated this thread. But I think you are dead right in your summarisation of the discussion. It is the ability to choose to work (or not) that is the essence of financial independance, which is really what many people who have contributed to this thread are describing as the major motivation, rather than retirement (which implies the complete cessation of ones usual paid employment.)
It is the freedom or the choice of not working that entices people to seek out 'retirement'.
My aunt, based in Singapore, aged 54 yrs, works roughly 10 hours a day with a global company, has 5 properties under her belt (1 in Melbourne, 1 in Sydney and 3 in Singapore). She is leveraged to about 80% and is focused on paying down the debt, so she can finally call it a day or work part-time. She currently does not have that option.
It is a real life example of managing your investments and not let it manage you.
Regards
Daniel Lee
I’m 25 and think of investing and business as my job.
I love the game feel of it, and plan to do it as long as i can.Yes i want to be financially independent, but to me that means being able to sell a few of my business’ or investments to pay down the debts and hire someone to manage the “business” for me. BUT that doesn’t mean i will.
To me it’s about peace of mind and enjoying what i do,
Knowing i could stop if i want to, but enjoying what i do enough to not want to stop.
If i didn’t enjoy the journey of investing i’d probably actually prefer working a 9-5 job. as long as it was a job i had a passion for.
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