1) At this point in time, no, however I don't require that much money to live on. 2) If I was to live a standard of living that I could not maintain, however I would adjust my standard of living accordingly. 3) I will have very little however I don't believe the pension will exist when it comes time for me to collect. 4) Offshore banking and a mix of shares and PM's. Most importantly however, is residing in a country with a low cost of living. This may be of interest to you: http://jlcollinsnh.com/2012/12/07/stocks-part-xiii-withdrawal-rates-how-much-can-i-spend-anyway/
My exit strategy ( mind you I am only 29 atm ) is to sell everything I own and move to a cheaper country to live like a king until I die. I dont know where yet but it will be what ever seems the best in 30+ years times If it was today it would possibly be Thailand or Vietnam.
I'm saying that 10% should be enough as long as you don't have unrealistically high expectations about the length and quality of retirement. Length especially. Will I only do 10% every year of my working life? Hell no. What do I recommend? If you can, invest into your own small business or a medium business with like minded people. If you can't and your speculative investment time/skills are restricted, then I would suggest going for a low fee permanent portfolio approach keeping an eye on where you can best try to avoid the financial repression that will be enacted by the Australian and international governments. This will be a moving beast and cannot be predicted far in advance, but recognising the risks and trying to adapt to them will be better than not recognising the risks. Hope that helps.
My retirement plans have been sped up by the current economic and political climate. Mind you I'm in NZ so things might be slightly different to oz. I have decided to retire this year and am in the process of getting everything finalised at the moment. I simply got fed up with the way our country is managed. I was working full-time and losing half of my salary to the government. It all hit the fan when I say some disgusting crime being committed in my hometown and the police failing to do anything about it. There was burglaries all over town, people waiting 2 days for police fingerprint experts to show up only to be treated as an insurance claim rather than crime victim. In the meantime having to live in the crimes scene without disturbing anything. Pedophiles active and reoffending and bailed to blocks with multiple schools/kindergartens etc with name suppression automatically hiding not only their current crimes but also their past convictions. If my taxes is paying for this rubbish I no longer want to contribute. Turns out if you tell a doctor that you are disgusted with the society we live in and no longer have the motivation to contribute you have a "mental illness". The good news is mental illness qualifies you for a sickness benefit - that's more than the dole with no job seeking obligations. I consider this my pension. I believe there won't be a pension during the last years of my life so I am claiming mine from the last years of the systems lifespan. I now have an extra 8 hours per day to look after myself, to grow food, hunt, fish etc. I am physically fit, active and cape able of bartering my labour for other items I require. I have a stack of PMs to fall back on should I need them. I have a spirit still so can make my own booze and am now stacking this away for future need if the SHTF scenario really takes off. Realistically I'm in a position I would be happy to be in as a retiree of 60-70. The fact I'm still not even 30 means I'm due another 30 or 40 years of retirement than the aveage worker drone.
I think most of us are anti-government here... but that is still a dick move. Pretending to be mentally ill so that you can retire in your 20s and live off the tax payers... You'll probably get more out in 5 years than you've paid in and then you'll just be another leech like every other dole bludger. At least get off that and just do cash work.
wow. things are that bad in nz? out of interest are you north or south islands. Visited south island only about 5 years ago. Seemd like a lovely quite place. Tour guide did mention vaguely that north island has more issues with maori and pacific islander youth.
I have a couple of Investment Properties, just doing my tax returns now as a matter of fact. They made about $14k each this year in rent but each cost about $7k in assorted rates, insurance and management fees. When I retire I will be able to manage the property myself which will save around $6k a year in property management fees but will mean that I am not fully retired, i.e. I won't be able to move to a foreign country and live like a king, I will have to be around to find tenants, troubleshoot etc. I read you need around 5 properties before they will support you to any measurable standard. I also read that most millionaires don't feel rich until they have about 5 million in assets. I have my SMSF, My Industry Superfund (Which I can't opt out of), my private investments in Precious Metals and my Star Wars figure collection, I just hope the collectibles come through because none of the others look to be doing much. Looking to get a couple more properties but not have them dotted all over the place, something a bit closer to home to make it easier to manage when I retire, maybe run a small holiday rental cottage or two, that way I can live in a nice area and run a small business I like rather than just retiring.
This line makes me really angry for some reason. So you're planning to have a 60 year retirement? How many years did you actually work full time for? I hope you fill up your days with volunteering or something because atm you seem like you're living an incredibly selfish life, your sense of entitlement must be unreal.
So you only made $7k after expenses per rental? How about after tax? How much did the properties initially cost? Sorry for being nosey, it just sounds a bit lower than I would have hoped for (I'd like investment properties when older).
I don't think many of us will even get the choice to retire Many Japanese ex-retirees, newly returned to work in the past few years, have commenced dying 'on-the-job'.
Simple math - if you want $52,000 per year (before personal income tax), then the property portfolio needs to net $1,000 per week. Even with absolutely no outgoings, this is 2 or 3 properties at $300-$500 per week rent. With outgoings (5-6 weeks rent in management fees, 3-6 weeks rates, land tax and strata fees, 2-3 weeks maintenance, 1 week fixed utilities, 2 weeks vacancy, 1 week insurance) you've easily lost 14-19 weeks in costs without blinking (or accounting for the long term depreciation of the building). And then there's the standard situation of most people having attached debt.....
Jesus, I didn't realise how high all the costs were... so essentially to actually get a 5% return you need to charge 7.5%? I fail to see why it is so popular. Although I guess prices have gone up heaps over the last 30 years which probably explains some of the psychological attachment to investment properties... but still, that's crazy. Edit: And you also need to factor in interest on the debt and tax? Sounds kinda excessive :/
Maybe I'll take dishonesty and backstabbing lessons then do a short stint as a politician. That should provide a good retirement.
First property was a 1960 fibro shack for <$300k paid in cash and the second was a new build for $460k, interest only mortgage. I think the idea is that in 10 years time the houses will double their value (and inflation will take 20 years so you are still ahead), you sell one property and it gives you enough money to pay off two mortages, i.e. one free house every 10 years, which I think is where some of the excitement comes from. Of course if property fails to double every 10 years you may have a problem. And in the interim you have paid 10 years of $32k interest per year to service the debt, per house, $320k, so you have paid for the house anyway but at prices that are 10 years old, not modern prices. Needless to say if negative gearing wasn't an option it would not be worth it, the $32k interest is a loss, as is the $4k in various costs and this all gets taken off the income from my real job. Plus you get a house! You never know when you are going to need one. It also generates income, my silver hasn't made me any money and it hasn't increased in volume, the houses at least give me $7k a year (Before tax)
Hey Byron. My retirement plans got smacked when I separated. Fire sale of property and shares. Summary, I ended up with not much after legal bills and a GFC that coincided. Anyway. At first glance the obvious is property because that's what makes sense re taxation when you retire and it's of course more "affordable" now interest rates are lower. We've got a growing population.......... The massive BUT is Australian housing has woeful return and is horrendously over priced. On top of that we are not in the slightest bit competitive globally, mining's finished, productive assets sold. Unemployment will be rising and wages will be falling. The only reason you'd do it is security in retirement with somewhere to live. I'm putting money in to super and saving cash (and of course some silver and gold). The whole super thing is a risk because as you know politicians cannot be trusted (but that applies to everything). The tax advantages are however great. I can manage it myself and only pay 15% on gains. If I could find a politically safe country to buy a house cheaply, I would. No luck and I'm sure not paying the horrendous prices here (don't forget, the UK bubble burst right after an investor ONLY led mini boom). My guess is, house prices will rise a bit from here and then either go nowhere or collapse. Either way, you can't make money out of it. The economy is screwed and it's heads we lose, tails we lose. It's very hard knowing what to do.
Reading some of the plans of the under 30 yr old fellows looking at their plans for 40 years hence.. 40 years is a hell of a long time in super years.. Eg Cast your time clock back to 1973.. A holden commodore would set you back $5000, today X 7 $35.. Home $15,000, today x 20 $300,000. and so on. The only things that have become cheaper are whitegoods, TV's and maybe a few other things. Now if someone who was 20 years old in 1973, was asked how much money would you need to retire in the year 2013, it would not be improbable for his/her answer to be around $200,000. Now $200,000 will not go a long way today..Some worked for those 40+ years dreaming of the day in 2013 of getting a new car, maybe a little up market with the intention of making it do for the rest of their life,, Also a world trip which would perhaps take another $40,000. Last of all a caravan for the last sprint aroun this great country. So your health is good, you get your gold plated watch from your workmates and you make your dreams come true..When you come home from your round Australia Adventure, you are almost skint..Never mind, the pension awaits and you can live a good life if your health holds. Remember most people who get past 70 finally become frail and have to rely on others for their remaining year. Let's hope you don't need a pile of cash in the final years. You fellows are right in thinking that there will be no pension in 40 years time and if there is it will be for those over the age of 75.. Now what will your $1.5 million do.. A new super Commodore with option wings, x 7 $280,000 ? A world trip x7 $280,000 , a caravan x 7 $300,000. You will be in the same position as your mate back in 1973. What to do? I don't bloody know! Stack a bit of silver/gold may do help a bit. Regards Errol 43
Yip I'm spending 3 days a week helping a mates dad out. He has a mobile sawmill and my mate worked with him on his last holiday, I was interested in it. My mate suggested I help out a bit cost he was worried about his old man working alone with big logs etc thought it would be safer to work with an offsider. Not so much cash work as Im learning some really valuable practical skills and have access to some lovely pieces of timber which lends itself well to enjoying plenty of creative projects with my spare time. The beauty of an early retirement is I'm still young enough to be active in persuing my interests. I just no longer contribute taxes towards a system I don't believe in. You're probably right about the 5 years, at some stage the right move is to get back in the workforce. Hell if the systems still functioning I might even make a taxable income. I am confident that in 30 odd years I've got buckleys hope of getting much back from the tax I'd have paid in. As for pretending to be mentally I'll. I diddnt claim any such thing. I simply told the doc how I felt about the society we live in and my lack of motivation to contribute.... wanted to perscribe me some meds....... out can guess how I feel about big pharma, sharing these views and refusing the meds he was pushed to push on me somehow led him to determine I was unwell. I think its society that's unwell but whole am I to argue with the doc.
