A four years retro

I just went back to check an old post four years ago to see if I am on track of meeting my five-year goal of achieving financial freedom at the end of 2022.

Strategy when market is slowing down

So some changes after that post, my partner closed the small business shortly, break-even from that business adventure, and we were back to one-income household since then. Roughly we have been a single-income family for about 9 years now.

I always wanted to buy another property, thinking of Queensland, but couldn't because of serviceability issue with one income.

Did a bit more renovation of the principal house, and the whole family are very happy with the living conditions and our family home. Same as most people in Sydney for this cycle, our principal home has grown in value, from around 3.2mil to 3.8 to 4mil.

The only investment property we have has grown from around 2.3 to about 3.2 to 3.5mil.

Mid this year finally I decided to buy another IP at around low 1mil range in outer suburbs of Sydney. I needed to sell some shares and paid down part of the loan of the principal house, then obtained another loan to fund the purchase. This new IP is at 110% loan (using other property as collateral), and it is close to cash flow neutral if only considering the interest payment, though the loan is on P&I so I can improve my borrowing power and have a lower interest rate. Within the next five years I plan to continue to buy another two properties at similar range so each of my three kids can have something to start off when they grow up -- i.e., we lock in the purchase price for them now, and they need to pay off most of the loan by themselves, or they can keep that as investment and stay at home; plus I may give them a lump-sum financial help of 200k to 500k when it gets to the time of downsizing in about 10 years time.

I have a share portfolio of about 1.1 mil, always wanted to reduce that exposure but that would incur some significant CGT.

Super combined is around 450k.

The plan is in around 10 years time I can sell my principal house, without any CGT, then move into my investment property and have a knock-down and rebuild. The money from selling the principal property can be used to pay off part of the loan, fund the rebuild, and to distribute some to the kids when they should be working by then.

Total portfolio base is about 10mil, with about 2.5mil in loans.

Am I on track of achieving my goal set in 2017 that I want to be at a stage of financial freedom at the end of 2022? I guess so if I don't plan to support my kids, and I could restructure my portfolio to have better cash flow. With the housing prices and cost of living issues, I would want to do a bit more for them, and in my mid-40, I think I can continue to work some more years.

Whilst I am happy to see my own properties grow in value, for people with family and wanting to support their kids, it is a mixed feeling. I cannot fight against the trend and market conditions, and could only try to do what I can to keep up with this.

 

2022 not that far away ,with those sort of numbers excluding tax then I would say well done..

 

I reckon I've put my post in the wrong section, maybe it should be in investor stories.

Different from most families, in our family with only one-income for about 9 years out of the last 10 year, I am the wife who has been managing the family finances. For anyone in a situation like that, though it is not easy and sometimes it could be emotionally stressful (sometimes because of society stereotypes that the man shall be the one working), it is doable. Now with family finance in a good position, I think it has to some extent helped us accept this unusual family structure.