$1,000,000 isn't what it used to be?

I read another article recently where it stated $3M is the new $1M?? 2015??

1 million hasn't been what it used to be for more than 20 years.

One million dollars in 1960 — around the time when having $1 million took hold in the popular imagination as a symbol of ultimate wealth — had the buying power of approximately $8 million dollars today.

Inflation has averaged 2.78% for the past 30 years. If we exclude the 10-year period from 1974 through 1984, when inflation averaged nearly 8%, the rate has been remarkably consistent since 1914, holding at around 2.75%. If we use that inflation rate as a rough guide, the equivalent of $1 million in 2014 will be $5 million in 2074 (in 60 years). If the place of the $1 million dollar payday in today's lexicon is outdated — and it is — by then, it will be positively extinct.

Here is the link with figures etc. some may find interesting
http://www.investmentnews.com/article/20140514/BLOG18/140519956/-1m-is-not-what-it-used-to-be


MTR

 

Yup. I remember years ago on Somersoft, $1mil equity was many peoples goals. These days most people would go for double or triple that I would say.

 

Even those frequenting tatt studios have a spare $1m

We need to set the hurdle higher.

 

I'd be more than happy with that personally

 

I thought that sounded a little bit low, so I looked the CPI up.

 

So more like about $14mil (rather than $8mil) based on those figures?

 

Somewhere around there, yes.

 

Carrot chasers, all of you!

 

I remember 10 years ago when we cracked the $1mil equity and were all "woohoo" ... now we have over $2.5mil equity and feel poor ... probably our own fault for shifting our personal goal posts and lifestyle factors ...

 

I dunno.. I can remember in grade nine... My maths teacher said "your parents are probably millionaires"... The class was so excited! I couldn't help but think it wasn't that much money.. But I was living in and around Glen Waverley at the time! Their parents would all be multi-millionaires by now!

 

In terms of investment - $1,000,000 net invested @ 6% return will generate $60k pa gross, not sure whether that return is realistic as far as property goes? Perhaps share will give a better return

 

I don't really understand this, are you talking about shares?

I have 2 properties in Logan generating 700 each a week in rent , one has a 250 loan the other 260
If I was to sell off my Melbourne property and pay off these 2 I would have 70k a year and rising in income not talking about future equity gains as well. Also this achieved all in 5 years as well

When I read about people saying that you need 2-5 mill in equity to retire I'm thinking wtf??? Interesting

 

That is a great return on Logan, gross? I assume dual income properties?

This is not the average returns though?

I agree there are ways of increasing cash flow, but I think most investors buy and hold. Returns in Syd average I think 4% today, not a great return at the moment thanks to the boom.

I am sure there are people who retire on less than $2million, it's dependent on many factors ie what income you need to retire, do you want toys, o/seas holidays each year etc etc.
There are people who happily retire on much less, on this forum.

I mentioned shares, from what I have read on SS/PC there are investors who focus/buy shares with higher yields 6 % net (fully franked), not interested in growth.

MTR

 

What country is this referring to?

Australia didn't have decimal currency until 1966.

 

Great job, I'd love to hear how you accomplished this, especially in a 5 year timeframe.

 

refer to @spludgey post above, he has revised the figures (thanks Spludgey)

 

Yes they are dual living and also I bought when there wasn't much competition and did all renos myself.

Daniel I bought and renovated a Melbourne property bayside and achieved quite good gains in a small amount of time. I then extracted what I needed for 2 deposits in Logan and researched what to buy for the highest yield in relation to the relaxed granny flat rules now current. I don't want to give to much away as this is still my strategy but you can do it mate it if you want, just research rents achieved for what sort of properties and then learn to combine it all efficiently. Good CG lately for Logan and more to come hopefully, good luck brother

 

Yes these are good returns but I do
not know how to retire early any other way!

Did you know that the lady in the Mona Lisa painting is a mystery? And that when painted Leo did not give her any eyebrows!

 

if you care to share

are the g/flat council approved?

have you had issues in terms of length of time to secure tenants?

I had this issue with dual occ in Qld, it quickly turned from cash flow positive to negative because of time it took to secure tenants

Perhaps Logan is different, I am not familiar with this area

 

yes, About mystery regarding Mona Lisa, but not the eyebrows

you are doing great

Melb bayside, good pick and you already achieved growth with Logan.
I think those jumping in now are paying much more