Anyone retired early solely from property or shares?

Hey I have heard that voice. Is that your voice I am hearing? What's it doing in my head?

 

Thanks Y-man, that's more like it.

Didn't want this to turn into a 'I'm having so much fun so why retire' thread or the merits of doing something vs nothing, etc.

It's a pretty basic question if you think about it...."I want/need circa $100K passive - for those who've done something similar, how did you get there?"

 

That's well over 10% gross yield in rents. Wonder what exactly he bought....I know they were cheapies but still..

 

8 figure passive income? Will take 7 for now but if you can get a passive million plus a year income than I am sure an 8 figure would be easily achieved shortly after.

Just read your intro story @The Y-man . Well done. Very impressive what you have achieved considering some of the adversities faced along your journey. Goes to show what can be achieved with some hard work and focus.

 

I am in bed way before then ...

 

Such a grandpa

 

What are you thinking this vehicle will be..and how much passive Y are you expecting to generate?

Land tax is also strangling my investments.

 

Shares.

Investing both outside superannuation and in it using the then very generous salary-sacrificing arrangements. The occasional tax refund reinvested and not spent (never waste a windfall.) Plus not really caring about flashy things and not a heck of a lot of funds were spent on stuff and fluff. However, it wasn't done solo so being with a lady of the same mindset helped. As did a good employment income.

A couldn't care less attitude to what others were doing but observing the screw ups they seemed to make and attempting to avoid doing the same was also of assistance.

 

We are retired and self funded, been do for 8+ years.

Our income budget is $80K for living expenses and to prop up our NG property portfolio plus $50K for travel. So a total of $130K.

Which, by the way, is roughly the same as the maximum amount a retired couple can receive tax free in pension phase using the minimum mandatory compliance percentage. That is:

$1.6M x 2 x 4% = $128,000​

The Government must have used our situation when setting this threshold .

 

3 times now

 

As the issue of a persons income is a matter between them, their accountant and the Tax Office I'll adhere to that principle. Suffice to say the tax office (or was it the ABS?) at one stage provided a graphic of income by quintiles and I'm not in the first three.

When income is bandied about I tend to work on a pre-tax basis to get a better idea of where I sit. For example there are claims by some retirees their life will be shattered beyond belief if franking refund is eliminated. Maybe or maybe not. All depends on their personal resilience to an adverse decision. However, I estimate $80k tax free pension is the equivalent of around $110,000 before tax and $45,000 tax free is about $55k before tax. Not all too shabby there I reckon.

And if you ever come across a former Federal public servant who may complain their defined benefit pension is awful and not enough, ask them the annual amount then divide by the current cash rate. That's how much capital you would need in the bank to generate that amount of annual interest. And many didn't pay one red cent to get it either.

Gees I'm in a cranky today.

 

Ah yes, a familiar concept. True with shares if you have to realise capital in order to pay the bills. Not true if you have sufficient capital and the dividend/distribution income generated by shares is such it can fund you. Even better if there is a surplus and you can buy more, especially when the price is downwards. Only my view. Wrecked the aspirations of many and very nerve wracking but goodness the GFC was a good time in some respects.

Head or heart in play there. You'll find the way which is suitable to you I'm sure. All the best with the task.

 

Great post! If i recall you invested in local australian equities (lics) in order to get that dividend stream happening early and then later on in life you branched out to capture some international holdings????
DCA over the long term in the younger years i take it?
Cheers

 

i noticed that. Teach an old fella like you to over exert himself on a long walk in inhospitable conditions. Given that you fell over and tore open your knee on a sidewalk I thought the weekend walk in the mountains might have been your last. I’m just thankful you’re still alive cranky or not.

 

how you did it:
Shares

what and where you bought:
Directly held Australian Shares

how long it took:
See next.

when/age you retired: Finished paid employment at 29. Started trading/Investing fulltime. I was undercapitalised, I had in the vicinity of 200K accumulated from savings and part time share market participation. Certainly, in those first few years I felt financially free because I was making money on my own terms and didn’t have to go to a job but I certainly wasn't retired. I worked hard and long managing the large risks I was taking. I’m 48 now and have substantially reduced the amount of risk I take in the market to the point I don’t have to worry about what the market does. So when did I retire? I don’t know for sure – it happened over a continuum, am I even retired now? – I still use the market to keep me mentally stimulated, but I sort of think of myself retired now because the risks are so low that I don’t have to manage and monitor them. My interaction with the markets these days is for fun and to passively harvest the equity risk premium.

how much passive income you're living off:
My ordinary spending budget is greater than the 100K you mention. For me, part of keeping the risks low is to only require a very small return from the capital. I spend less than the capital is ever likely to produce. My budget for expenses is set to my personality – At times in the past I have lived on less and more. Less than you desire suxs in a self-explanatory way, but for me, so does more, in a perverse way. I need a budget to keep me grounded and true to myself and to the extended family and friends that are important to me. In other words, the capital amount doesn’t dictate the budget, but it is enough to fund the desired spending without any sequence of return risks of running out of Capital. So, on that bases I consider myself financially free.

did you do it with/without kids etc.
Two kids and a wife. The wife has worked on and off – Her external wage when it existed, especially in the early days after I stopped working was a huge help as it alleviated needing to draw income from the risk assets at inconvenient times and so allowed for extra risk taking.

Talking about my own story feels a bit self indulgent, But hey, I get to stroke the ego and hopfully let you see what is possible at the same time. The reality is I positioned for luck AND got lucky.

If there is a secret – it is following your passions. Share were my passion – I’m sure there are ways to make it with property also, but I have no experience there, which makes me wonder why I’m on a property chat forum. Mind you are we “investor” first or is the method, property/shares more important? I think the former.

 

Shares through and through for us. Had IPs earlier on but too much baggage and terrible income compared to shares.

Speaking of income even a simple ASX index fund has provided a wonderful growing income stream:

 

That's an amazing disincome stream!