I am 20, can I retire by 30 through property?

Discussion in 'Investment Strategy' started by Accumulo, 16th May, 2016.

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  1. spludgey

    spludgey Well-Known Member

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    Crossover to Mr Money Mustache @Plutus, sounds like something that you might enjoy reading (if you don't do so already).
    I do agree to an extent, $30k without having to pay for housing could actually be quite comfortable for a single person. Personally, I wouldn't want to retire on that amount of money though.
    But just imagine if you actually have a passive cash flow by age 30, this would be an incredible head start and would allow you to invest so much more than if you didn't have that amount of money coming in. So if you were to plan a gradual retirement over the next decade, while continuing to invest, you could live quite comfortably in Australia with a family of four..
     
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  2. Sackie

    Sackie Well-Known Member

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    I think this forum should have been called " Settle For Less Investing Chat".
     
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  3. Plutus

    Plutus Well-Known Member

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    I haven't but I'll check out that site now.
    RE: "But just imagine if you actually have a passive cash flow by age 30, this would be an incredible head start and would allow you to invest so much more than if you didn't have that amount of money coming in."

    I don't think I'll be there by 30, I detailed this in another thread but my plan at the moment is
    • Sitting on 2x IP's that are taking care of themselves, less than 80% lvr each.
    • About to (hopefully) buy a PPOR in my neighbourhood around the $400k mark> will have it paid off (into offset) by the time I'm 35.
    • Move out of paid off PPOR, that's now IP3, pull $300k out of the offset
    • $200k goes into PPOR 2 aka "forever home"
    • $100k goes into IP4
    • Pay off PPOR mortgage 2 in a similar timeframe to PPOR Mortage 1
    • Be 45 with a paid off PPOR & 4x IPs. Any extra $$ generated from rent over the 25, 21, 20 & 10 years I've held them for will go to either paying down the loans a bit or buying shares.
    • Retire or keep working for fun money.
    I think I'm going to have way more money than I need.
     
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  4. lynchy

    lynchy Well-Known Member

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    There are so many things that can go wrong leaving yourself with $22 per week. You're stuck if you want to make any sort of major purchase

    and food, $40 a week? What are you living off??
     
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  5. Iamnumber5

    Iamnumber5 Well-Known Member

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    I think that it has reached its peak about a year ago, and now it's not a good time to invest. Hot periode was between 2011-2014.
     
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  6. Plutus

    Plutus Well-Known Member

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    Breakfast: I have vegemite or peanut butter on toast w/ a home made latte most days (got a good quality grinder + coffee machine)

    Lunch: Dinner leftovers

    Dinner: I eat a lot of fresh produce that I buy from the market. I can pretty much fill one of those woollies canvas bags with produce for $10 depending if I "treat myself" with stuff like $6/kg mushrooms. Stuff like stir frys or bolognese. I Cooked a stir fry on saturday for dinner & used around $7 worth of vegetables, $10 (1.5kg) of chicken, 3 cups of basmati rice ($1?) and made 2 dinners + 8 lunches. = $1.80 a meal. maybe $2.00 after misc stuff like the cost of the lunch boxes, oil, salt, etc.

    We then eat out maybe 2-3x a week which is normally below $50/total, but then we will have the occasional really nice restaurant dinner which works out to be about $20/week or $1k a year. That's where my $70 restaurants and entertainment goes (okay, and the occasional $8.50 movie)

    Keep in mind this is just my budget, my partner earns similar. So our "household" grocery bill is $60 per week + $140 on restaurants and entertainment. I mean I'm confident we could live off $40 week of groceries, but it would get a bit boring and we do a lot of social

    Private health insurance covers a lot of those risks (I haven't taken a sick day or needed anything other than travel shots in 10+ years, I exercise 3-5x a week, not super worried about my health)

    Also you missed my $20 a week misc budget & my overkill $30 a week misc bills budget (overkill because my actual misc bills are more like half that)

    So to be clearer, MY budget is under $30,000 a year, our household budget is more like $60,000 & we're double income, no kids. very comfortable. I budget separately because all our finances are separate. I normally have a lot left over in my end of month budget, which I blow on wine & toys.
     
  7. Plucka

    Plucka Well-Known Member

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    I found the clothing comment the best: "Constantly updated wardrobe" for $15 a week, rofl.
     
  8. EN710

    EN710 Well-Known Member

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    Or about $780 per year. Sounds quite reasonable - you don't need to use that $15 right away
     
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  9. Mumbai

    Mumbai Well-Known Member

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    That's what was my reaction to it. Seems pretty reasonable.

    @Plutus I can learn a thing or two from you. I am not a big spender myself but very dis-organised. I get onto budgeting for a week and then ...
     
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  10. Plutus

    Plutus Well-Known Member

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    Ehh, I'm one of the better dressed people in my office. Keep in mind I live in QLD. Also I'm in my 20's and not earning millions, so the standards maybe aren't as high?
    My casual gear is mostly t-shirts & shorts or T's and chinos (its QLD.. its hot)
    my workout gear is whatever's on sale at amart (I don't give a **** about what I wear to the gym)

    Work wear wise I only need to wear a suit 1-2 days a week. Currently I've got 2x herringbone suits bought during sales & 1x made to measure institchu suit. Sure, they don't have super fancy brands, but they are still half canvas and are made of decent quality material.
    The rest of the week I mostly wear OCBD's & chinos.
    Dress shirts I wear luxire made to measure dress shirts & OCBD's. They cost me $40-60 a pop.
    Shoes: I've got a pair of black RMW's & a pair of brown RMW's that I bought 5+ years ago as part of a 2 for $400 deal at a factory outlet store, 2 pairs of black oxfords, a pair of brown oxfords, a pair of tan derbys. I leather condition my shoes regularly, never more them more than 1 day in a row & shoe tree them after every wear. I think my youngest pair of shoes would be 4 years old.
    Formal wear: I've got a black dinner suit & 2x white jackets. have all but one of the jackets since I was 18.

    I seriously don't get what you're spending so much $$ on clothing for? Most of my shoes are good year welt, most of my work wear is made to measure.. Where is your $$ going. I've spent $0 this year too, so I've got $370+ ready to go for next time I want something..
    $370 worth of clothes might not be a lot to you, but for me I'm only a few weeks away from being able to afford a pair of loakes (british made good year welted shoes, should last 20+ years with proper care) or nearly enough for a very nice suit. I would probably buy this one:
    Royal Blue Prince of Wales Check
    because I'm fairly conservative.

    But I've seen this one in person:
    Royal Blue Overcheck Suit

    and its absolutely stunning. But because the pattern is so distinctive you'd need more suits in your wardrobe to be able to have such distinctive patterning. People wont notice if you re-wear navy or grey, but that sort of patterning really stands out.


    Mostly I try to just by quality stuff (not based on label!) and take care of it.
     
    Last edited: 18th May, 2016
  11. wogitalia

    wogitalia Well-Known Member

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    Yep, I'm another who thinks $15 a week is plenty for clothes. I've spent $50 so far this year.

    Hit the Myer stocktake sale for a couple of new work shirts and pants each year is ~$100, socks and jocks are $100 a year, new pair of work shoes every couple of years is $70 nowadays with online shopping. So that's about about $250 on work clothes a year. Casual clothes you're up for a pair of jeans every couple of years at $80, so $40 a year, new pair of shoes once a year, so another $80 a year, couple of shirts a year is $40. Gym gear is comparable as well if needed. So say another $300 on non-work clothing and that's $550 a year, that's under $11 a week.

    It's really only when you start working and have to buy the full rotation and the suits and the like that you need to spend more than that and even then it's only $1k or so outlay that will get you 5 or 6 years usage after that it's pure maintenance mode on the clothes!

    Between internet shopping and sales I can't remember the last time I spent more than $100 on a piece of clothing. Normally I'll get 6 or 7 T-Shirts for that.

    Doesn't hurt to live in Perth where wearing a jacket is for pure **** factor and you pretty much just need really hot weather and nice weather clothes which really is shorts and a t-shirt or jeans and a t-shirt.
     
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  12. ellejay

    ellejay Well-Known Member

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    It can be done reasonably easily, especially if you don't need $100k per year. We both worked remote for 5 years and saved around $100k each year. We paid off 4 reasonably modest houses, all but 1 yielding 9-11% gross and paid deposits on some others. Now have a ppor paid for and a liveable income per month. We're selling 1 at the moment that will increase income to pay for treats. We also have a few just being paid down on p&i by tenants. So we can sell some off over the next 20 yrs and know we'll have more equity if we haven't expired by then.

    I know this isn't the cool way of investing. No doubt someone will say we could have bought in Sydney instead. I'm enjoying what I'm doing though, and it's a viable option that doesn't rely on growth. It does rely on a few years of good wages and frugal living. Anyhow, at 46 I know neither of us need to work again. I could have gone harder much earlier and got there sooner, so yes it's achievable.
     
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  13. gman65

    gman65 Well-Known Member

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    I spend $50 on groceries a week, it's not hard. Few steaks, some vegies, fruits, non brand name cleaning products, etc. I cut down from $70 to $50 just by going to Aldi. $1000/year in my pocket. I hate brand names/advertising anyhow. I only need to eat dinner and breakfast at home, work provides my lunch + coffees.
     
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  14. spludgey

    spludgey Well-Known Member

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    Agreed. I would think that I don't spend much more than $100 each year on clothes. However that's a little bit dishonest as the majority of clothes that I wear were bought by my with, my mum or my mother in law. Still, even if you add everything up, it would be around the $500 mark per year.
    The expensive thing for me is if I need new shoes. I'm a size 14 or 15, so I generally can't get cheap shoes anywhere. I have to buy dress shoes for work every two years and they're between $150 and $200 a pair.
     
  15. wogitalia

    wogitalia Well-Known Member

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    In a few years you'll be fine. I'm a size 13 and used to be able to always get shoes in my size on sale, now they seem to be the normal size (kids these days...) and are hard to get on sale. Online is always a good option on shoes though, you try them on at the shops and then find somewhere selling them cheap online.