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Achieving financial independence

Discussion in 'General Property Chat' started by sillyman, 7th Feb, 2016.

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  1. sillyman

    sillyman Member

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    Currently working in a warehouse/stock job and save about $600 out of $700 a week and have got about 10g saved. I'm 19yo, live with mum and have nothing to pay for except fuel and car registration really. I'm sick of my job because it drains me of my time and energy to follow my interests so I'm wondering how possibly soon I could become financially independent through cash flow property realistically with what I earn. Appreciate any educated input. Btw by financial independence I mean $500/week passive income
     
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  2. wylie

    wylie Moderator Staff Member

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    Welcome sillyman. Keep on saving and I'd suggest looking for another job if you don't like the one you are doing now. I would suggest you gather a deposit, stay with your mum for a while and buy an IP. The rent will go towards your serviceability. But there are plenty of other options.

    Well done on saving $10k by age 19. Just resist the temptation to blow it on a "new" or "better" car.
     
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  3. Cactus

    Cactus Well-Known Member

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    To achieve your $500pw you probably need about $750k of unencumbered property.

    Its a good start but I think you will need to aim higher for financial independence. A Ltd will change in the next 10 years that it will take to achieve that on your current income. You might decide to move out of home... You might decide to start a family... You might want to travel or upgrade that car....

    Certainly good to start now though. I wish I'd started when I was 19.
     
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  4. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Welcome @sillyman. My quick take on the info you gave.

    1. You’re super young so time is no your side.

    2. Your goal is easily attainable in time

    3. Your saving $700 which is enough to start. I would try to increase my salary as much as possible if i really wanted to go hard and do this asap. Start saving like mad for a deposit. get 2-3 jobs, overtime, weekend etc. It all depends how badly/fast you want to get there.


    I'll give you the same advice I would give my own family:


    1. Buy some books and learn the basics. (DD, cycles, strategies, growth drivers, leveraging)

    2. Network with the forum, ask questions and more ask questions and read topics and learn about property investment via books, forum and networking.

    3. Build a team for you to work with for building your portfolio. (Finance broker, accountant and lawyer to start).

    4. When you are ready, have a plan and know which state you want to buy in, what strategy, what dwelling type etc then just go for it.


    Just my opinion.

    Good luck.
     
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  5. sillyman

    sillyman Member

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    Thanks for the reply. Funnily enough I had turned down an offer on a really good car recently due to my burning desire to invest. I plan to stay with mum as long as possible but I really strongly feel the need to move in by myself to be able to focus without the distractions of the rest of my family. I am also desperate to find a job/career that is more suitable to my interests but I can't and haven't been able to put a finger on what since I left school, my current job is just an income stream to me.
     
  6. sillyman

    sillyman Member

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    I know what you're saying and in reality I would like more, I just simply can't decide what career direction I want to take and I'm just starting to feel like all I want at the moment is to be able to live off passive income and have all the time to read books and follow my interests..
     
  7. sillyman

    sillyman Member

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    Thanks for the advice!
     
  8. Omnidragon

    Omnidragon Well-Known Member

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    Don't buy a car. I didn't buy my first car until I was 23.
     
  9. Cactus

    Cactus Well-Known Member

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    Everyone will tell you find something you enjoy doing, the money is secondary or the money will come.

    However if you enjoy reading books the money probably won't come from this unless you can find sponsors like an MS readathon but without the MS.

    Therefore I'll throw another option forward.

    Whilst you consider what you'd really love to be doing (hard to work out when your 19) just find the most financially rewarding work you can put up with and smash out a big deposit and start investing. get yourself cash flow positive ASAP and go again. Try and get ahead before you move out of home.
     
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  10. eskander

    eskander Well-Known Member

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    If you are thinking longer term then further education/developing your skills can be a method of increasing your income. You are only 19, so an apprenticeship, TAFE course, university course are all still options. Just keep in mind $500 p/w passive income won't happen overnight. Good luck :)
     
  11. sillyman

    sillyman Member

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    That's a good idea and has sparked some thoughts in my mind.
     
  12. Leo2413

    Leo2413 Well-Known Member Premium Member

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    [QUOTE="sillyman, post: 156169, member: 4417I'm just starting to feel like all I want at the moment is to be able to live off passive income and have all the time to read books and follow my interests..[/QUOTE]

    I am not trying to be harsh just save you a lot of time and get straight to the point. Thats never gonna happen (excluding pension/super) without investing to eventually get that passive income. I know at 19 it must be quite hard to want to accept that or face it, but its just the reality. I think @Caltan gave you great advice how to proceed if you are unsure about a career atm.

    I am sure many 19 year olds are thinking/feeling similar to you atm. The problem is that you want to have passive income of $500/week (i'm sure you'll realise you want/need more in the future) which will require you to do things differently to most people if you want to achieve your goal.
     
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  13. sillyman

    sillyman Member

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    I know and I have been looking at different tafes and degrees and apprenticeships for the last year or so I just have too many pros and cons for everything and it's killing me. Even considered small businesses like a mobile coffee thing or fish and chips shop..
     
  14. sillyman

    sillyman Member

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    I am not trying to be harsh just save you a lot of time and get straight to the point. Thats never gonna happen (excluding pension/super) without investing to eventually get that passive income. I know at 19 it must be quite hard to want to accept that or face it, but its just the reality. I think @Caltan gave you great advice how to proceed if you are unsure about a career atm.

    I am sure many 19 year olds are thinking/feeling similar to you atm. The problem is that you want to have passive income of $500/week (i'm sure you'll realise you want/need more in the future) which will require you to do things differently to most people if you want to achieve your goal.[/QUOTE]
    I did mention investing is exactly how I plan to achieve that passive income
     
  15. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    So what are your interests? Perhaps there's something there you can turn into a business?
     
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  16. Propagate

    Propagate Well-Known Member

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    @sillyman I posted this thread last week, might be something in there of interest if you want a career change? Get a good career behind you and get the dollars earned in the next 10 years put to work and you should be sweet.

    Apprenticeships Available.
     
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  17. BKRinvesting

    BKRinvesting Well-Known Member

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    Hi @sillyman, I applaud your enthusiasm and empathise completely with your strong desire to be financially independent. I too share that strong passion. I started investing when I was 21 (my first year out of Uni), and I can safely say (5 years later) - that it was a fantastic decision but in hindsight I could have been further along my journey if I had done 1 thing much earlier...
    A Plan.

    My advice is make a financial plan, and include the following things:
    1) The goal(s)
    2) The high level plan and options
    3) Some detailed planning and assumptions (which will be updated and reviewed periodically)

    Then go do it. There is no golden bullet, if there's one thing I've learned from this forum, its that many ways work. But with any thing worth doing in life, it won't be easy.
    Make sure that when you consider your goal, you consider your future circumstances, not just your now. The easiest assumption I can see that will change with your current thinking is that $500p/wk will be enough. I think you may find it will be much more, especially if you plan to move out of home soon. (Which you should include in your plan). There are many rentals that in themselves cost >$500 p/wk, and that's assuming you are renting. Not to mention bills, groceries, etc.

    Also, a plan will show you areas where you need more knowledge. The detailed planning process will allow you to pose yourself questions which will then guide your research and learning.
    I get you are frustrated, but time is on your side - but on the same hand - it will take both time and sacrifice. There's a reason why the statistics are what they are.
     
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  18. wylie

    wylie Moderator Staff Member

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    Thinking further... Approach a broker from this site and see how much you need to save before you can borrow. Stick with the job you don't enjoy if you can and save hard. If you do what our son did (one option) and buy a cheap unit where the rent almost pays the mortgage from day one, you can stay at home to minimize your expenses.

    Once you have a loan, you can swap jobs if a better one comes along. Maybe an entry level office job where you can study or move within the organization as you mature and upskill.

    Staying in your current job a little longer could be worth it if it means you don't have to wait six months once you get into a new one. You could also borrow earlier with a parental guarantee of with a "deposit" borrowed from your mother. Our kids did this.

    We handed them no "free" money but were in a position to enable them to buy earlier than they would be able to had they had to save a deposit.

    They pay us as well as paying the bank but they also know if something bad happens (lose a job, illness) we will be there to help.
     
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  19. Leo2413

    Leo2413 Well-Known Member Premium Member

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  20. kierank

    kierank Well-Known Member

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    I would suggest you are aiming too low with $500/w passive income. If you do a quick web search, you will find out that you should be targeting $825/w for a single and $1,130/w for a couple. These numbers are after tax, in today's dollars and assume you own your own home. This will provide you with a comfortable lifestyle (not a lavish one). Why would you aim lower?

    If one assumes a 5% income from your investment assets, this means you will need a portfolio of $860,000 for a single or $1,175,000 for a couple and these would have to be held in a tax-free environment (eg super in pension phase). If you use a lower income number (say 3% or 4%) or you hold your investment assets in a taxable environment, you will need more.

    Investing is easy to understand but not as easy to do (that is why a lot of people go through life and end up with very little). There are only three broad investment streams:

    1. Cash generators - wage/salary, own your own business, etc. Find something you are passionate about as you need to do this so that you can do the next two. BTW, don't limit yourself to a 37 hour working week. I have operated business 12 hours/day, 7 days/week (yep, 84 hour/week). This is perfectly legal. Can also have multiple jobs.

    2. Buy property. A lot of good advice on PC.

    3. Buy shares. I have a preference to do this in a super fund (personally, I wouldn't buy property in a super fund but that is another story).

    Then give yourself time. You have plenty of that. I did the above and exceeded my expectations in less than 20 years. You have 40+ years on your side. The harder you work on this, the sooner you will get there.
     
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