Anyone retired early solely from property or shares?

We started investing at 40 , 20 years later . We are about to finalise a unit subdivision that if we used the profits to pay down debt we could retire comfortably IF we sold our weekender .

However I'm aiming for more than 80-100 as I want to keep our house in Sydney , our waterfront weekender , travel OS on a regular basis and I want to buy a nice boat and that's going to take a bit more

Luckily , I enjoy my job and it's one that I can work at part time .

Cliff

 

I think the simple answer to the question is no, for the following reasons.
You can’t simply make money out of property or shares. You must have a source of income to buy the investments in the first place. Be it a job, business or inheritance.
No one that is on $80-100k passive a year thinks they are on easy street and doesn’t want to continue the process to increase their income.
If you enjoy the cut and thrust of property or share dealings, you don’t want to give it up to play bingo.
If you have interests other than bingo, it will cost you more than $100k a year to enjoy an early retirement.
If cars, travel, children and helping others is a passion, then you want to indulge yourself without fear of not having enough.
My passive income is over 40 times your limit and I can’t see the value of a full retirement at 58 years of age

 

How much of what you've achieved do you attribute to your high PAYG income?

I feel like this very important point is so often left unmentioned that rookies often get disillusioned. I know it sounds like something very obvious but not many on here or anywhere for that matter would have been able to 'retire early' without having a higher than average income or an inheritance or dramatically reducing their expenditure. Possibly a combination of them.

 

So if I understand correctly, you started with seed capital of $200K approx 20 years ago....and over the last 20 years you've managed to get that seed capital to a state where you now receive over $100K pa in dividends??

 

Well, unless one devises a method to generate a huge passive income, they'll have to make do with $100K (more or less).

I think it is worthwhile in asking the 'how much is enough' question. If pursuing more $$ (beyond the minimum you think you need) results in more stress, an impact on your health and less SANF, what's the point?

I know this doesn't really apply to you personally though, because you get a kick out of finding dev sites - and do it extremely well. Kudos to you.

 

I could teach you, but I'd have to pay you for it!

 

yes, that summary is correct.

 

I think we can help each other.

You keep 20 times the limit and give me the other 20, and I'll show you the value of a full retirement at 58 lol.

 

If my PPOR was paid off, I could EASILY live off $100k!
But then rather than cars, my hobbies are gardening and building things, which actually save you money rather than costing you money (if done right anyway, currently breaking even with gardening).
Plus I am and probably always will be, a cheapskate.

 

19 times goes to the ATO.

 

That’s what my first wife said!

 

Im in two minds whether to write this or not. But I will tell you my story.

My dearest grandfather was an orphan at 9 years old (family had no wealth so never was he left with anything) and at age 16 took a gamble on whether to buy some cobbler gear to start repairing shoes or stay in a job he hated.

He chose to buy the gear.

He then starting working for someone who then later sold him the shoe repair business when he was in his 20's. Aside from keeping the business afloat he poured everything into the sharemarket. - We all know what compounding does!

He retired at 50 and although travelled overseas, played golf and lived comfortable and happy, never really lived a flashy life, just humble and wanted for nothing. He passed away 3 years ago at age 86. His estate was worth nearly 9mil.

He told me in my adult years that investing in shares today is nothing like what it used to be like.

I however am grateful I got to learn from him and take a piece of his advice with me in all my decisions now.

Moral for me sharing this. You don't always need to be conquering other peoples bucket lists or goals. Ride your own journey and be happy that we live in a position to lead comfortable lives.

 

Thanks for that story...reaffirms the importance of playing the long game.

What was he implying that investing today wasn't like the old days (apart from the technology changes)? That the performance can't be replicated?

 

All good. Held up OK. Merely took my time. Crankiness due to other factors and those factors are known as people.

 

Yes and my approach has been discussed previously. I don't think it was magic. Only time. Kept on plowing in when cash was available and surplus to needs. Plus what one financial dude termed having a strong sense of financial discipline. Got burnt a couple of times but that's part of the process probably. Unfortunately I only walk on water every other Friday and it was the Fridays off which caused grief. Overall put it all down to pure dumb luck.

Frankly, I don't think if I started now I would be in such a good personal position. The relatively large amounts which were possible to place in superannuation are not available now so I think it'd be a harder slog. As an example when anything over $50k pa was taxed at 47.5% (I think) it was possible if someone had discharge the mortgage on the PPOR or other on-going but finite financial commitment they could salary sacrifice the pre-tax equivalent and the change in their available cash flow would be minimal. Ain't the case now but I haven't done the numbers as I've no need to.

Being who we are, we do have a trait towards taking as much advantage as possible of any tax breaks available to us at the time. It's our nature I reckon and while I am not inclined to write a blank cheque (what is a cheque some wonder?) to the Tax Office, I don't chase tax breaks. They are there and I'll use them because I am a bit greedy as are others but those breaks are not forefront. Sort of a capitalist with a slightly (almost) social conscious.

As an addendum, I distinctly recall when GST was introduced, the after-tax amount in was reasonably large for some. One fella I worked with cottoned on he - and his wife I assume - would need to spend about $60k per year on GST items with that tax reduction so he salary sacrificed it and said he noticed no difference in his ability to meet his financial commitments. He also arranged to salary sacrifice any annual bonus he got. That's the sort of thing you could do with a $100k concessional amount. Not now though.

It's why I get annoyed with some of my peers who do not appear to acknowledge the advantages available to us at certain stages and have the audacity to now complain they are doing it tough and it's just soooo unfair.

 

I think because of technology life moves at a faster pace. People aren’t in it for the long haul. A lot more Day traders because it’s easier to trade and not so many buy and hold. So many government changes who change the rules of investing etc. I think this applies to property now days too.

He said he would call the broker buy a stock, wait for the advice to come in the mail and put it in the drawer and forget about it.
I know in his later years he actually couldn’t keep up with the amount of dividends coming in as he wasn’t reinvesting the money as he was just past dealing with the compounding. I hope I get to that stage!

 

Yes,, we live from income from our properties alone.......however I do run my own (very) small business on the side. Any profits get ploughed into reduction of debt.

Like many of the others, we started a long time ago & bought whenever we could & held on. Sometimes the holding on part was hard, sometimes it was easy. We targeted cashflow positive properties. Our kids were quite young when we started & they have seen the good, the bad & the ugly.

As for the amount of passive income we generate, it's a reasonable amount. I'm not sure exactly what it's going to be this year, as this is the first year that we don't have a large CGT component to take into consideration. I take a certain amount of $$ from my 'investment account', each month & spend that. Often there's more $$ than needed & the excess sits in an offset. I also funnel funds off to the sharemarket now as well as paying down more debt.

The PPOR is debt free, and several of the properties are sitting with completely full offset accounts.