VIC $4million cash, 40, single [plan needed]

This could be avoided by structuring too.

 

Hi @cloudproof

Good job on your progress.
We're in a very similar position to you.
Quite a similar history, similar story and path.
Same age and similar asset base per person, as a small family of three.

Our next move is very likely your option number 2.
We also don't have any commercial property either, but want to secure something substantial for cashflow and minimal ongoing management or maintenace.
Keeping it simple.

 

I would agree with some of the above.
Its gets more complicated with more money. Keep it simple.
Make sure your goals are clear ( property, family, job( continue contracting or get a perm job)...
Work from there. Lack of clarity will eat big into any savings.

 

Solution, give it to charity, problem gone... the devil made me do it

 

This. Set old mate cloudproof up his own subforum so he can give advice.

 

Ummm.... I think you are a little wide of the mark there..actually, quite wide

 

I think you would be better off starting a business. If you are on 200K p/a you must be a highly skilled person. Try doing a business with the skills you have got, potentially involving the countries where you want to travel. That would be time well spent.

 

Screw that.. $4m in cash, and you want to travel etc? If I had $4m cash I'd probably retire right now. Invest $3.8m into LICs and keep $200k in cash. Setup a disc trust to own the LIC shares and distribute sufficient dividends to yourself, then keep the rest bottled up in a holding company (owned by another disc trust perhaps) for later.

The fully franked dividends @ ~5% on $3.8m are $190k/yr. That's a gross income of $270k/yr.

Essentially a set and forget prospect. No tenants to worry about, no bills to pay, no business operations to worry about.. just buy your plane tickets and make sure you've got the right visas and your passport doesn't expire.

 

Apologies for misrepresenting your wealth. You did retire 2million worth of debt last year alone. You can't teach him to be you though. All your clients will be getting capital growth via market forces and debt reduction via dual occupancies. None of they gets all the fees and commissions you make!

Misread his question. Since he wants to grow asset base plus get cashflow, that's definitely your territory.

 

It is indeed

 

if you are suggesting that only posters that acheived more than 4 mil can teach/give meaningful advice to the OP, you are incorrect- that would be greatly discounting the skills, knowledge, experiences of posters regardless of wealth obtained. Financial advisers for instance often have far less wealth than their clients...yet clients pay them to give advice ( skills, knowledge experiences, etc)...
Evan a porsche has wheels and headlights...just like any other car.

 

With $4 million cash and a 200K income to utilise...sure can 200K is exactly what I draw down as an annual salary from my company .... so he can literally do what I do, to the dollar. I didnt have $4 million cash to get started though, so arguably he can get where I am even faster than I did...

The whole irony is..the more cash you build up, the more assets you build up, the more income you build up... the more choices you have. Too many people get confused by it all... try to complicate things. Stick to 2 or 3 income streams.... salary ( whether PAYG or business income) income from LIC's /ETF's... income from cash cow resi property

Then build income via SMSF, separately

 

Personally I would be more interested in developing something like this: Highbury SA - Development

$420k gross profit.

 

I'm not sure that's the case, many anonymous polls indicate otherwise. I doubt many/any members would have $4 million in cash lying around though.

 

I think the @austing strategy is the go here given your requirements. Stick the lot in a bunch of LICs (with some international exposure) and just take the dividend. $4 million at a conservative 4% is 160k a year and leave you with a buffer of 80k.

There will also likely be capital gains to grow the underlying $4 million asset base. Low risk, low hassle, why bother yourself with keeping a track of properties and developments in Australia while you're traveling if you don't need to.

 

The author of this thread looks a bit suspicious to me. I lot of what he has given us doesn't seem to add up:

• 4 million cash?
• 'had experience in real estate'. Why has he come to this forum?
• 'made 2,000,000 in after hours work'. Hmmm!!
• Made 200,000 a year. How does he find time for after hours work?
• Seems to have made a lot of mistakes in his investing but still got 4 million cash. ???

 

That is one approach. Something we haven't really discussed is dividend reinvestment. With a realistic income of over $200k but only spending $80k per year, if all the surplus was reinvested into LICs the portfolio is going to grow very nicely.

 

Half into 2 x CIP's at $1m each where you can structure outgoings to be paid by tenants
Other half into mix of LIC/ETF/cash mgmt for spreading of risk

With that sort of cash asset, why bother with resi tenancies and all the nose wiping associated with it

 

This, most of established investors here who grew wealth via property over multiple cycles are equity rich. Well, they could be cash rich if they sold.

Think @Ace in the Hole was the opposite, he had a very successful business and used that to buy properties.

 

Makes sense to me. Investing isn't a one time thing either, so once the OP is more confident with investing in CIPs he could always pick up another couple using lease doc loans.

You only would if you were really passionate about building.