Hi all, New to all kinds of investing and keen to learn. Single income with kids. Thinking of selling our overcapitalised home and using the proceeds to pay off mortgage, go back to renting, then split the rest into savings and investments. I’d really appreciate any thread suggestions for an absolute beginner. Thanks, TP
Hey and welcome to the forums! Before you make any big decisions, it's important to ask - what's your end goal? If you're not sure what you're trying to achieve, it's very difficult to gauge best way to move forward.
Hi Jess, In the next 12-24 months I want an income of $1000 per week. I want to double that in year 3. And double that again in year 4. By the end of year 5 I want to be earning $20k+ per month. I want to use the income for philanthropy, growing my kids’ trust fund, my retirement fund, and funding my own fun (travel, home, outings etc). That’s the dream — I have a lot to learn first! TP
I wouldn’t - renting isn’t the same freedom as owning your own. And you’ll never get the stamp duty or capital improvements back.
Hi DT, I’d like to know more about your thoughts? Some more info: The house is a new build that was supposed to be the family forever home — we spent way too much on it thinking we’d be in it forever. Now circumstances have changed and it’s bleeding money in maintenance and running costs. I wonder if the best option is to offload it, take the loss on the chin, start again. TP
And the plan to achieve this? Income from what assets / investments? How much net after selling the house and paying out the mortgage? Job income?
Not sure yet! That’s what I’m here to learn about. Like Jess said, I need to know where I’m going to figure out how to get there.
So let's reverse engineer this: $1000 per week = $52k per year (before tax, ungeared etc) To get this say in a term deposit (very "safe") at 2% pa you need 52000 / 2% = $2.6 million For a 6% ("reasonable" risk) you need $867k For a 15% return (high risk) you need $347k So you can see a lot depends on what you have now, and what risk you are willing to take. The Y-man
Thanks Y-man. Do you mean from a term deposit of $2.6m? If so that’s what I worked out also. I’m cautious sharing more details online, but it’s a custom on-trend Hamptons style house. It wouldn’t fetch that much without a small miracle but it would definitely net most of that. Lived in it 12 months in July — does that mean no capital gains tax?
Ok - that's going to change a lot of responses if you are saying you can net that sort of money - form your original post, we couldn't tell if it was a heavily modified house in the middle of Thargomindah. The Y-man
Understood. Well, without outrageous risk (no more than the I'd say the majority of the population face with their super), if you had $2m, you could generate around $120k pa. At that point though tax considerations come in, so yes, you need to look at income generation vs capital gains type investment.... probably all mumbo jumbo right now ... You might want to see a good financial planner to get some ideas, as there are a whole heap of variables like age, age of kids, income, living costs, super etc. The Y-man
