FIRE Starters (Financial Independence, Retire Early)

Why do you want to be debt free? Your Net Wealth can grow exponentially, organically, if you let assets grow 20%( with leverage should be do able every year) your LVR drops 25%. When your kids become independent you maybe surprized by how much you can borrow with increased servicability and an LVR of bugger all %. You may be able to increase borrowing by 50% live on a LOC. with an LVR continueing to fall organically because of growing asset base .

 

These are not options. An acronym comes to mind some one coined about investing. TINA. There Is No Alternative. You can reallocate capital and get better results than A or B.

 

I think this question really harks back to the age old question of 'when is enough, enough?'
Everyone is going to have a different answer to that question. There is no single correct answer. And no doubt a lot of people's 'enough' is a higher then my own.

We have already hit 'enough' and surpassed it. And trust me, it was a shock when I sat down one morning last year and actually assessed our situation and made that realisation.
The mindset changes from 'how can I best and most effectively accumulate 'more' wealth?' To 'what should I do with what I have?'.

I am a naturally conservative person when it comes to finances and investments. There is an emotional value in eliminating the last of the debt.

Our net worth will continue to grow regardless of whether we repay the debt early or not. So I see no real reason, for us, to retain the debt any longer then we need to. All it would mean is that I could potientially die with slightly more money then is already the case.

 

If you have enough you could still not pay off the loans but just fully offset it and let it sit there. It results in the same interest savings but with the added advantage of if you ever suddenly needed that money it would be there and if you used it you would be able to get some deductible interest.

Say one of your kids had a non-deductible and you made an interest free loan of $100,000 to them. They could save say $3,000 in interest per year (which they may need to earn nearly $6,000 to pay) and you could get $3,000 in extra tax deductions meaning it might cost you just $2,000.

 

This question isn't about building capital, buying more assets or active forms of income like strating/selling a business.

Purely about deriving cashflow from either selling IPs or investing the proceeds in the stockmarket and to PASSIVE income. What are you suggesting exactly?

 

Well, we're clocking up circa $110-120K pa in expenses including rent - a little more if you include international travel. As you know, I rent by choice.

$1m doesn't touch the sides. Enough for a single person to retire in Thailand though.

 

I'm not relying on LOR because by the time my debts are paid off/start being paid off, it'll be 15-20 years from now. Too long in our case. We don't have the income levels to pay them down quickly without selling.

Our level of debt would make some weak in the knees but there are multiple properties being held at a blended 50% LVR.

So the plan is:

• living expenses are paid for by dividends
• the properties, and their trapped equity are pots of money that we can call upon (sell) if/when needed
• Super is icing on the cake at 60 and a further insurance policy ie buffer

 

There is definitely value in what you are saying. And people should consider it.

We have already considered this aspect, for us in our situation, that 'possible' tax deductibility, is not sufficient reason enough to stay in debt.

I am a little torn here between wanting to explain and not wanting to share too much detail on the internet. But suffice to say that possibly future financial assistance for all of my children has already been considered and addressed seperately from this wealth we are looking to retire on.

 

agree
I think the idea is also a part pension??

 

Which most of us on this site will never get bc we do what we do. The irony of it all.

 

Jeff Bezos steps down as CEO with $262b

Stepped sideways, semi-retired?

 

Extremely comfortable FIRE then.

 

Able to afford more expensive toys

 

I plan to retire at 35. This is how

 

whats the point of retiring now when on lockdown. You can still get paid for staying at home. Perhaps a lot will pull the point when the lockdown ends and they cannot bear the thought of going back to work every day.

 

Looks like I ain't the only one to think there's a few husslers in this space.

It’s Time to Retire FIRE (and to Split It Up)

Hypocrisy and Manipulation - Is the FIRE Movement Corrupt? | Money Flamingo

 

Hi all,

First time post in this thread and apologies if this has already been covered elsewhere (appreciate any links), but was keen to understand whether there was an agreed best asset ownership structure for what I would call, basic FIRE?

In my mind that is a couple who are living off income producing assets (rent/dividends/share sales) until superannuation kicks in and then only topping up any shortfall in superannuation pension and living expenses with investment income.

I have seen a whole host of different structures for different assets, but was wondering if like a share portfolio, this was possibly over-complicating things relative to the benefit. I absolutely want to get the structure right from the outset and think it is critical to successful FIRE.

 

Nope. Everyone does it differently. There is no such thing as a 'right' structure because it will all depend on circumstances which are constantly changing.

 

Nah! Just looking for another tax haven if the sea steading doesn't work out.

 

Many different methods and asset types. As long as they generate steady and reliable income.
As for super, I was going to retire at 40, made no sense to put my money in accounts that I couldn't use till I was 60, if I get there.
Add to that my goal was to not depend on gov for anything other than emergencies.