Broke and starting again

Discussion in 'Introductions' started by 2ndTimeAround, 4th Jan, 2019.

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  1. 2ndTimeAround

    2ndTimeAround Active Member

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    I had some really bad luck after success in the 2001-2007 period, its all a bit personal but a lot of it was having to look after ill parents with no income coming in for 8 years.

    So Im mid 40s and was really depressed for a while with the thought of having to start all over again. I lost a parent and things seemed bleak.

    But Im slowly growing my enthusiasm back. Money is great to live off and to buy experiences but Im no longer interested in the cars etc I was in my 20-30s. Id like to spend 10 years going hard core working and try to semi retire at 55, work part time or continue day trading nasdaq.

    Anyway, Ive been out of the Aus property market for a while, so I thought joining this forum would cheer me up and get me thinking positively again.

    I earn just over 6 figures, Im an extremely frugile person, so I tend to save pretty much everything outside living expenses which use to be between $1000-1300 a week. Im hoping thats enough to get me to my 10 year goal of semi passive income and retirement.

    Being an Aussie with a NZ passport now, I can take my Super out at 55 which is kind of spot on, it might be 56 or 58 before I can stop my day job. But I estimate without any real estate dealing, my pot will be close to $900k AU. I plan to buy a small pad in the Bay Of Islands in NZ Northland, so hopefully NZ's economy poops itself in next 10 years and that $900k will become $1.2NZ.

    Prices I saw in NZ are off the chain, the price index is now the highest in the world but the Price to Income ratio is the worst in the world. Im seeing Auckland plateauing over the last year and expect a downturn then a decade long plateau. Everything ripples out from what Auck does. Just a guess, but the last 8 years have been near vertical.

    Id also like to have something In Bris if possible to be close to my other side of my family. I considered running it air bnb or similar for when Im not visiting.

    Im an avid spear fisherman, my favorite boat are big Haines Sport Fishers, I use to fish out of Port Stephens. Still love that area. Have missed NSW coast a lot.
     
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  2. Mike A

    Mike A Well-Known Member

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    sorry to hear about that but mid 40s you still have time.

    did you say your savings were $1k to $1,300 per week or that is what it cost to live. if saving $1k a week over 10 years you should have accumulated $675k roughly with a growth rate of 5% per annum

    so getting to your $900k mark in 10 years i think is quite doable.

    do you currently have funds in super ? that will also grow over the next 10 years
     
  3. 2ndTimeAround

    2ndTimeAround Active Member

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    Wow thanks for replying and being supportive. ive joined investment forums before which are dominated by elitists just squirting their ego juice into words. So cheers.

    Yes, I use to pay $250 in rent, shared with 1 other in an executive property overlooking the beach. Was gorgeous. I cant remember my bills exactly but just assume normal amounts. I probably spent too much on food as I was eating a lot of junk which Ive turned around. I would save between $1k to $1300 per week, I dont drink or eat junk anymore.

    I use to spend my after work time playing Xbox and Poker. I actually use to make money daily on poker, but the variability now days makes even perfect strategy unprofitable online, in person casino play still works.

    I want to spend my time outside of my day job either studying how to make more money or making more money.

    Prior to renting I would reno and flip, not as fast as most who want in and out, possibly 3 months some times, but I was mortgage free so was ok. Of course any profit was made at purchase, sometimes it wasnt 30%, sometimes only 10% below QV, but I enjoyed the process so much it was theraputical for me.

    Landscaping was my main interest in renovating, I know my limits and had a trust-able list of tradies for everything I found by trial and error I cannot do. ie great Tiling is a real art.
     
  4. Mike A

    Mike A Well-Known Member

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    all good. we all make mistakes. if you have a decent income then it will be much easier to recover at your age. if you were 60 and earning 30k per annum then things wouldn't be as rosy i agree.

    10 years will be plenty of time to build your wealth, hone your trading skills and practice and then enjoy life. i lost around $1m aud over a 10 year period from some deals that went sour. so the best advice i have is to keep going.
     
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  5. 2ndTimeAround

    2ndTimeAround Active Member

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    Thank you so much, its motivating to know Im not the only one who has gone bust in life and had to start again.

    I really got deeply depressed at one point, when you are use to having money and then its gone its demotivating and in your late 20s that youthful naive excitement makes getting going easier.

    The other thing is, nobody needs to know I am not a millionaire, so many millionaires dont dress or spend like most think multi millionaires would.

    I dont want a jet plane. I just want a small pad in that gorgeous part of NZ and a 6 metre boat to get out to the islands and an 80 series Landcruiser, and maybe if Im lucky a Triumph Speed Triple bike would be my only splurge. And hopefully 6-10% ROI on about $800k property. And maybe work part time in a dive shop to keep myself social and to supplement the income. So I think I need bout $1.3m NZ. Given the amount NZ has borrowed, and the US, if China starts getting needy for its lending it could start a big dip. All crystal ball stuff of course.
     
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  6. Gockie

    Gockie Life is good ☺️ Premium Member

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    All sounds like a really nice plan :)
    Sounds like you have a great ability to save, you don't waste money, have a very solid income, and you seem to have a great goal. I believe you can get there. I don't know how the NZ economy will go over the next ten years (you have a prime minister I think many would like to have), and NZ did really well with being able to export milk to the Chinese. Maybe the NZ economy won't tank and you'll have to suck that up... but maybe there will be a dip sometime.
     
    Last edited: 4th Jan, 2019
  7. The Y-man

    The Y-man Moderator Staff Member

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    Oh, you are going for a helicopter instead? Awesome! :D

    The Y-man
     
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  8. Scott No Mates

    Scott No Mates Well-Known Member

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    @2ndTimeAround - you've mentioned the land of the long white cloud & the Bay of Islands (great part of the world).

    @ellejay can help regarding NZ.
     
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  9. Propertunity

    Propertunity Well-Known Member

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    If it’s any consolation, a healthy chunk of our buyers agency is dealing with 45 yr olds who have no investments to date and who want to retire in 10 years as 55 year olds.

    You have a different reason for being in the same situation. In their case it is mostly life catching up with them after raising a family and paying down a house loan and climbing the corporate ladder and then realising they had better do something soon before retirement.

    Welcome to the forum.
     
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  10. 2ndTimeAround

    2ndTimeAround Active Member

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    Thanks all, really uplifting support.

    I think if you plan things and have a risk strategy in place its just a case of executing and being commited for a period of time.

    Everybody has a different amount they deem feasible to retire on. I saw that youtube thing on moustachians lol, they basically late 30s and live off 4% of their money invested in blue chips. Personally thats not for me. Although I could live off $40k if I had my house and boat and car paid of, too easily. I guess I will see what my percentages are at the end of the process as Im looking to landlord not Stocks.
     
  11. ellejay

    ellejay Well-Known Member

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    Your plan is very doable. I'm a bit similar, have a 6 figure salary and live frugally usually, although I'm currently on a 2 month holiday visiting Tas, NZ, US and Canada. It only took me about 5 yrs to be where you want to be. Mainly bought in NZ because my money went further without stamp duty and land tax etc and growth was the same in this recent boom. Bought in Australia too and recently US. I lived frugally and now have a few mortgages paid off, keep paying down more debt no matter what. Buy CF positive properties and/or with equity potential. I'd only buy in NZ or us in this climate unless something out of the box came up. Go hard and pay them off and voila...you'll be there..no magic involved at all.
     
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  12. 2ndTimeAround

    2ndTimeAround Active Member

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    Thanks Elle. Auck/NZ is bobbing like a garfish float the last 2 years, basically plateuad. They borrowed LARGE in 2008 to avoid and Ireland situation, I dont think there is much they could do if another recession hit to avoid a tank. So Im very wary. They are finally implementing CG tax but I dont think stamp duty or land tax which Ive always thought were a con, but what you going to do :). It will take me a couple of years to get a solid deposit together and Im hoping something like the US or NZ debt has pressure put on it.

    Did you see that doco about what the wolfs on USA St got up to in the last decade? Basically buying US business titles that are defunct but titles still valid, then attaching an overseas business (guess where) to it, then floating it on the stock exchange, once that got busted they then started shorting them. Thats not the facts, but Ill try to find the doco name. Some people will do anything to make money.
     
  13. ellejay

    ellejay Well-Known Member

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    Sounds like you're over thinking things and trying to second guess what prices will do. In the meantime plenty of people are continuing to make money in NZ/Aust/lots of places. You need a strategy to make money regardless of what the market is doing
     
  14. 2ndTimeAround

    2ndTimeAround Active Member

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    Of course. My strategy is simple. But there is the reality of world economies, its not over thinking its more, -40% is realistic and can happen, so in your strategy you need risk management. I have 5 methods so far in my strategy. At the moment in NZ very few are making Capital Gains, outside those that buy, develop and sell.

    Auck had flat lined in the last 2 years. The National price index is the highest is the world. Its income to price ratio is the worst in the world. They want to keep building, take on more immigrants to pay for pensions as they have no super system (kiwisaver but its new and pretty lame). Add to that Milk and Tourism are its biggest earners, its not the most solid set of products to form an economy on. So imo its at the mercy of world economies, especially due to the borrowings in 2008 and now the national mortgage debt levels, its like a double bubble lending trouble.

    [​IMG]
     
  15. ellejay

    ellejay Well-Known Member

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    Exactly, succesfully buying, developing. selling is making money. Buying and holding does not actually involve making money unless you're well and truly CF positive, cash out or you sell. I honestly don't spend time thinking about what the economy might do or studying graphs but each to their own of course.
     
  16. 2ndTimeAround

    2ndTimeAround Active Member

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    Yeah definitely. NZ is still doable, it just has a less secure economy. I know we complain in Aus, but when that Iron Ore becomes popular again, bingo. NZ always bounces with Aus economy the lowest I can remember was 72cNZ to the $Au. But if NZ does take a hit and Aus goes into boom I can see it going much lower. All ifs and buts, like you say, thats why I like to get in and get out haha.
     
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  17. 2ndTimeAround

    2ndTimeAround Active Member

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    At the moment I need to build my net worth and capital gains fast.

    I had my ex rip me off in my last renovating in Aus, but I may have a winner who has her own money and her parents in Europe do ok. But Im not going to involve her yet in the plan. But she also earns a meager 6 figure income (she has a PHD).

    The only way I know how to do this is buy under market value, a frugal strategic renovation aimed to get the properties to sell. rinse and repeat until I have enough money to start buying IPs back in NZ in strategic areas, Dunedin, Wellington and often overlooked New Plymouth. I can get properties in Dunedin and New Plymouth with 8-10% ROI, Wellington is more of a safe bet and evens out my portfolio.

    So this means staying in my beloved second country Aus for another 10 years. Im dual citizen so I can come and go, so I did consider buying a small duplex or similar on the Sunshine Coast and renting it out in summer as a holiday pad and living there in Winter as I love the climate and the surf and the boating.

    But this would mean I would need two boats hehe. A smaller one in Aus, I have a good grasp on older Haines Hunter models that suit.

    But my problem Im stuck right now is calculating my capital gains for the next 10 years, of course I will buy positive cashflow high ROI properties in NZ while Im making Money renovating, but its hard to say how many houses I can realistically do per annum. What would be nice is to have a long term role in Newcastle as there are sooooo many Diamonds in the rough there just needing a bit of spit and polish, and I know the area well having lived there before.

    But lets say conservatively I would look to renovate 2 houses per year. If the cost is $400k and I aim to make 20%, I need to buy at least at 25% market value which is $100k, if I can do a renovate for $25k. that leaves me close to the 20% profit. But even if it works out at 15% its still a good return of $60k. If I can do 2 of these a year, thats $120k. If I can save $1500 a week from work thats $75k, so all up just shy of $200k.

    So every 2 years thats a substantial property in my strategic areas. Particularly Dunedin. Im looking at Multi Dwelling properties. Often big houses will be chopped up into a 2 bedroom flat upstairs with seperate external access and 4 bedrooms downstairs. I want multi dwellings as you always have someone paying the rent, even if its short for a month of a room or lets say 2, its still paying me money, where houses can be vacant for more than the desired 2 weeks a year most hope for.

    These are common in Dunedin due to the student and if you spend large you can buy in well to do areas like Maori Hill (strange name I know) where people are of the affluent sorts in Dunedin and its close to Uni for students. But one of these would be $600k minimum. So I will start with single dwellings for he first few years unless I see something right up my ally pe say haha.

    I need approx $600k to build my dream home in an area that is big on tourism and whale watching, diving and fishing, up North of Auckland. I also need about $180k for my boat. So I will need to get my money working for me fast.

    I might end up taking 12 years, who knows. But if I can go boating, diving, freedivig, spearfishing every day for the rest fo my life, oh well.

    Am I thinking on the right path to financial freedom and early retirement?
     
  18. Joynz

    Joynz Well-Known Member

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    I how do you figure you can take your super out at 55?
     
  19. Redwing

    Redwing Well-Known Member

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    Welcome 2TA

    Life's always there to throw a curve ball such as the four Ds: Disease, the Death of a loved one, Divorce, or a Disaster.

    I've never been to NZ but looks like an awesome place to retire

    NZ has propertytalk
     
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