Can we retire in our early 30s?

Discussion in 'Financial Independence, Retire Early (FIRE)' started by Arecaceae, 10th Oct, 2021.

Join Australia's most dynamic and respected property investment community
  1. Arecaceae

    Arecaceae Well-Known Member

    Joined:
    9th Oct, 2021
    Posts:
    56
    Location:
    Australia
    My other half and I are both professionals in our early 30s. We worked very hard over the years, made a lot of investments, and built a portfolio together.

    We prefer to live a minimalist lifestyle and prefer to use organic and locally made items whenever possible. We only have one car between us and take public transportation as much as possible. We don't eat out very much, and we don't take many vacations abroad. As a result, our cost of living is relatively modest. We don't have any children, and if we do decide to have one in the future, it will be just one child.

    We're thinking if joining the FIRE movement is a possibility for us. We'd like to hear what you have to say. We have the following assets:


    2 houses adjacent to each other on a corner block (one worth $1.6 mil for PPOR, the other worth $2 mil for investment, rental income $995 PW). If we sell both houses together as a development site, will probably be worth $4.9 – 5 mil.

    1 x house plus a couple townhouses worth around 2 mil for investment, total rental income $1,645 PW

    Total loan: $1.45 mil, offset account: $400K, and ETF: $400K.
     
  2. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,932
    Location:
    Brisbane
    Regardless of the financial situation (which seems impressive for your ages), what would you do with yourselves all week if you retire now?
     
    qak and Joynz like this.
  3. tedjamvor

    tedjamvor Well-Known Member

    Joined:
    22nd Oct, 2019
    Posts:
    218
    Location:
    Melbourne
    Let me get this right.

    So you have $5.6m in housing assets, $1.5m of that is a loan with an associated $2.5k per week in gross rental income ($130k pa, although I'm assuming your overall housing portfolio is cash neutral after loan repayments). You also have $800k in other assets for a total of $6.4m (net of ~$5m).

    It sounds like you could retire right now if as you say, you basically don't spend any money. What will you do in retirement? If you're not taking holidays, do you have any hobbies, passions, interests that could see you working 1-2 days a week for yourself or a charity? Would be pretty boring sitting around all day in "lockdown" because you've got all this cash and nothing to do...
     
    Tofubiscuit, jjbeagle and Joynz like this.
  4. standtall

    standtall Well-Known Member

    Joined:
    19th Oct, 2015
    Posts:
    2,701
    Location:
    Sydney, NSW
    Absolutely.

    1) Liquidate current assets in 2-3 steps to minimise tax
    2) Buy a PPOR in Brisbane (low maintenance smaller block close to public transport - budget around $1m)
    3) Spend around $30-40k to get off the grid completely
    4) Invest all the proceeds from asset sale into index funds like VDHG and target income around $50k-$100k

    And you are retired! No banks, no bills, no carbon foot print

    Other option is semi retire - buy a corner house and convert 1/2 house into an organic cafe .. pick your own hours.. you won’t go crazy sitting doing nothing ..
     
    icic, Ian87, wombat777 and 1 other person like this.
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    Yes you could retire in the next 10min
     
  6. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,439
    Location:
    Melbourne
    Just try it out - if you don't like it you can always go back to the grind.

    The Y-man
     
    BigL, Stoffo, Tofubiscuit and 6 others like this.
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    This is so true yet often overlooked.
     
    TDevereux, BigL and Arecaceae like this.
  8. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    6,675
    Location:
    Mt Druuiitt
    Go for it.
     
  9. LROB

    LROB Well-Known Member

    Joined:
    1st Jul, 2021
    Posts:
    343
    Location:
    Vic
    TBH retirement is garbage. Don't know if its because my mind races OR if managing my portfolio is boring AF but its certainly overrated OR if its because of these lockdowns. Better off finding a passion and turning it into a lifestyle.
     
    qak, VanillaSlice and Joynz like this.
  10. Anne11

    Anne11 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    571
    Location:
    Brisbane


    I have been following these guys: one recently retired one working toward it. There’s a theme about asking ourself what to retire to.
     
    Joynz likes this.
  11. PKFFW

    PKFFW Well-Known Member

    Joined:
    15th Mar, 2018
    Posts:
    424
    Location:
    NSW
    Perhaps it's not the "retirement" part that is garbage. Perhaps it's the not having found a passion. Or, in fact, anything at all that one might find better than to spend one's time working.
     
    Anne11, Ian87, wylie and 1 other person like this.
  12. MWI

    MWI Well-Known Member

    Joined:
    17th Jul, 2017
    Posts:
    2,287
    Location:
    Lower North Sydney NSW
    Regardless what you plan to do or follow, IMHO, if your total current passive income not earned income (so passively generated from investments not a job) surpasses your total expenses then you can easily retire, or leave your current jobs if that's what you are after?
    You can become self reliable and self responsible regardless of age as long as your 'passive' income is greater than your 'expenses'.
    Then hopefully you are truly free to pursue what your hearts desire!;)
     
  13. Ian87

    Ian87 Well-Known Member

    Joined:
    23rd Sep, 2016
    Posts:
    681
    Location:
    Melbourne
    Can't tell if this is a serious question or a massive humble brag. But yes, you could retire. Quite easily.
     
    Sgav likes this.
  14. LROB

    LROB Well-Known Member

    Joined:
    1st Jul, 2021
    Posts:
    343
    Location:
    Vic
    My passions are seasonal.
     
  15. PKFFW

    PKFFW Well-Known Member

    Joined:
    15th Mar, 2018
    Posts:
    424
    Location:
    NSW
    Then perhaps you need to find a passion for every season. :)
     

Price Accounting provide investor + developer tax services world and Australia wide for your property and all tax issues. Contact Paul@PFI below for our new client pack and quoted pricing + client portal access. Trusts, Co and SMSF are our specialty.