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general opinions on my strategy

Discussion in 'General Property Chat' started by luckystar, 8th Nov, 2015.

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  1. luckystar

    luckystar Well-Known Member

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    Hi there

    I am thinking of changing my life around somewhat and have made some financial assumptions which I have to do in relation to the years ahead. I thought it might be good to get some feedback as some may of been through this already

    I am employed full time but looking at resigning and relocating and traveling more over the next 2.5 years, living overseas in a lot more in cheaper countries and working a small amount back here in Australia, currently I can live off 30k a year and I cant see this changing much

    I'm single, mid thirties no kid,s no bad debt, 30k buffer, fortunate enough to be easily employable in a high demand industry, have 15k a year in ongoing contract work

    I have 3 properties in qld, loans are 750, values are a mill, is cashflow positive,

    I should have enough cash to tie me over the next 3 years, but after that I would like to access equity, I have assumed a growth rate of 4.5% over the next 4 years in qld which I think is somewhat conservative. and over 6 years I worked out I need aprox 6% a year to achieve 600k in equity

    1, the concern I have is that rates may rise over the next 3 years past 8% and then I will have to return to work though how likely will this be?

    2, once I am 38 I would want to access at least 50k of equity, I can arrange full time work for 3 months prior to this, this is so I can stay part time for another 2 years.

    3, achieve at least 600k in growth by the time im 41 (6years from now), pay off 2 properties and then live of rental income continue to work part time for another 5 years

    the other option is I continue to work full time and buy a couple more over the next 2 years, but my goals I think are rather low and achievable so I would rather be doing something I enjoy

    thanks in advance
     
  2. MsAli

    MsAli Well-Known Member Premium Member

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    @luckystar, out of interest, why would you aim low?
     
  3. Liam Blanden

    Liam Blanden Well-Known Member

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    People often harp on about having a clear strategy prior to starting their investing journey. This is a perfect example of how much clarity you can gain from having an easy, step by step, REACHABLE plan to financial freedom. Props to you @luckystar .
     
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  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    1. When RBA rates rise they tend to jump up in 0.25% lots. It would take them a long time to reach 8% I think. The outlook is generally low rates for years to come.

    2. Yes

    3. This is a statement not a question. Growth may or may not happen. How are you going to pay off 2 properties in 6 years? Especially if you are living on the cashflow.

    Going overseas can be a good strategy, I have written a thread called "mini retirements" which you may be interested in.

    But watch you do not become a non resident for tax purposes, otherwise there could be adverse tax issues.
     
  5. luckystar

    luckystar Well-Known Member

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    the whole point for me building this up was to eventually leverage into my own business, but recently a family friend was diagnosed with an terminally ill disease-he spent this whole life building up a stockpile of equity so he could travel, now it wont happen.

    I have a fear this will happen to me and I don't cant find the criteria in my mind to deal with it, so I have figured that if I can enjoy some of the things I really want to do with limited cash over the next few years I will be happy and then when I reach forty if I am still alive I can maybe leverage into something challenging with excess "disposable income" if I have it...so to speak

    this is a hard decision for me as my nature is so ambitious driven, but I feel its the right decision to make
     
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  6. luckystar

    luckystar Well-Known Member

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    thanks for your feedback

    I have read your thread, it has inspired me to do this.

    Im not sure of that just yet, I think it would be best to wait and see what growth materialises and then buy more or pay down one and buy some cheapies outright

    I have one which is yielding 12% and is well located, it is also a developable block. I may be able to sell one and pay this one off and build more on it

    I will always be happy working part time
     
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  7. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    I don't think this is aiming low - more like living the dream.

    People often wrongly assume that living off not much is 'aiming low', when in actual fact living off not much can be more like paradise than you realise.
     
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  8. MsAli

    MsAli Well-Known Member Premium Member

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    I was quoting how luckystar defined it : "my goals I think are rather low and achievable"
     
  9. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    I know - I pressed post too soon :)
     
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  10. Ted Varrick

    Ted Varrick Well-Known Member

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    Hi luckystar, You might consider just doing a few "What if?"s. What if you pull a big Powerball? What if your properties get rezoned for 20 storey high rise? What if your tenant invites in a guest who trips on skateboard and there wasn't any landlord insurance? And, what if (obviously hypothetically) you were walking down the street and, dodging some goose doing a Facebook update about walking down the street, you inadvertently became a shock absorber for classic Steinway that a disgruntled stockbroker had pushed though the window of the 24th floor....?
     
  11. luckystar

    luckystar Well-Known Member

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    I been what if'ing my entire life, now I just want to drink beer, surf and worry less
     
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  12. datto

    datto Well-Known Member

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    Lucky, as much as I concur with the beer drinking and the odd bit of weed (not sure if you mentioned that lol) I have to say that your second option sounds the best. Keep working and buy more.

    Don't let your friend's illness slow you down,

    I remember one school I attended (before being kicked out) had the motto "Aim High". Well I flicked a rubber band at the teacher and hit her in the head....too high...I was aiming for her cleavage lol .

    In life high ambitions lead to high results. That's what I see.
     
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  13. dan2101

    dan2101 Well-Known Member

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    Luckystar.

    Props to you. Go live the dream while you can.
    Recently had a close mate at work in his late 30's killed in a car crash. Busted his ass since he was 20 to buy a house and pay down the mortgage. When he wasn't at the fire station he was landscaping as a second job. Unfortunately he never fully got to enjoy the fruits of his hard work. Roam free while you can. You never know what's around the corner.
     
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  14. Ted Varrick

    Ted Varrick Well-Known Member

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    Then Crescent Head Tavern might be worth checking out might be a nice place to start.

    Nice place, don't forget to pack light...