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

Discussion in 'Living Room' started by MTR, 11th Oct, 2015.

  1. MTR

    MTR Well-Known Member Premium Member

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    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 If the place of the $1 million dollar payday in today's lexicon is outdated — and it is — by then, it will be positively extinct.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:)
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    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.
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    Even those frequenting tatt studios have a spare $1m

    We need to set the hurdle higher.
     
  4. Cimbom

    Cimbom Well-Known Member

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    I'd be more than happy with that personally
     
  5. spludgey

    spludgey Well-Known Member

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

    upload_2015-10-11_15-35-31.png
    upload_2015-10-11_15-36-6.png
     
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  6. D.T.

    D.T. Adelaide Property Manager Business Member

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    So more like about $14mil (rather than $8mil) based on those figures?
     
    Last edited: 11th Oct, 2015
  7. spludgey

    spludgey Well-Known Member

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    Somewhere around there, yes.
     
  8. Biz

    Biz Well-Known Member

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    Carrot chasers, all of you!
     
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  9. Lizzie

    Lizzie Well-Known Member

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    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 ...
     
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  10. legallyblonde

    legallyblonde Well-Known Member

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    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!
     
  11. MTR

    MTR Well-Known Member Premium Member

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    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
     
  12. E.T

    E.T Active Member

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    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
     
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  13. MTR

    MTR Well-Known Member Premium Member

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    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
     
    Last edited: 11th Oct, 2015
  14. Random Username

    Random Username Well-Known Member

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  15. Daniel007

    Daniel007 Well-Known Member

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

    MTR Well-Known Member Premium Member

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    refer to @spludgey post above, he has revised the figures (thanks Spludgey)
     
    Last edited: 11th Oct, 2015
  17. E.T

    E.T Active Member

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    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
     
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  18. E.T

    E.T Active Member

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    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!
     
  19. MTR

    MTR Well-Known Member Premium Member

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    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
     
  20. MTR

    MTR Well-Known Member Premium Member

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    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