Multi -asset Investing modelling - 15 yr plan

True you can't leverage shares as well or readily as property. But because it produces income and CG...it offers more income.

Property on the other hand can be leveraged at 90% plus and if bought well you will also get CG.

I can only speak for myself...but I have founds that high CG properties tend to be in lower socio areas and they will give CG but not as much as better properties. The sweet spot is 4-6 type properties. My strategy initially started with CF properties then moved to older mid level properties..but now I focus mostly on building new places where I get 40-50% uplift within 18 months and also get 6% plus yield...thus has turbo charged my portfolio.

I am now in the process of exiting out of any property that does not return at least $400pw...and getting rid of older properties. I have 30 (includes some stuff I have bought recently) ...and trying to tip the balance to mostly newer properties which will give me a more reliable income from properties. At the same time I am also growing my ETF and Super.

Hope this helps

 

I am glad to get response from an seasoned investor like yourself !

• Its interesting to note that you have found high CG properties tend to be in lower socio areas. I have spoken to few financial planners (pro-solutions) and property advisor (metropole) - they suggest investing in only bluechip suburbs for high CG and avoid outer suburbs. Its practically not possible to build portfolio of 4-6 properties in Sydney region as Bluechip suburb means $2mil +
• I am also inclined towards development - as it gives immediate CG plus bonus of depreciation benefits. I have been following new growth suburbs in Sydney (Schofields , Marsden park, Box hill, Leppington) , Brisbane region (Springfied) and Melbourne (Point cook, Tarneit). Any particular suburb/region , you would recommend?

 

This will defer tax but not save tax. Will have to pay delta (47%-30%) when income is distributed to wife or myself.

 

Tax Tip 374: Bucket Company Saves Tax Even When Dividend Paid to Top Marginal Rate Taxpayer? Tax Tip 374: Bucket Company Saves Tax Even When Dividend Paid to Top Marginal Rate Taxpayer?

 

This is awesome !!

 

Sorry not lower socio....middle of road properties offer best CG and yield balance in my opinion.

I am cycle..I think Perth offers the best opportunities...Brisbane is crazy so will need good skills to buy. I don't think the BAs have any advantage now....

 

Clearly you haven’t thought this through.

 

Recapping.
Ppor (good but not that useful for investment, because you need it for retirement)

Super not useful for now because you cant touch it.

you have 850k cash and 4m ish borrowing capacity.

sounds like you bought a ppor for 1ish a few years back, saved into the loan to fully offset, and now its doubled in value?

goal is at least 10m net plus ppor in 15 years.

so you would have to turn 5m exposure (most of it borrowed) into about 15m in 15 years. Problem is the stuff you can gear safely is probably lower yielding.

how much can you save, and really, can you get to 500K income in retirement? Also are you really comfortable with debt? Youve ignored gearing so far. Your cash position is very low for the level of asset exposure you are aiming for. Rate rises or hit to your job income will spiral very quickly.

Your position is potentially very good, but thats in the future IF certain things happen (certain levels of growth, no negative hits to your job). The risk is overextending and then you get a job hit. 15 years is a short period to assume even the long term growth rate.

sydney long term resi might be 6 or 7%, but for each 15 year block thats dubious. Dont think you need an explanation on what vol is.

as an aside, those on much lower incomes (and spending) than you, who geared and bought earlier, would have more net, more assets and more cash than you at your age. Income is great, but it can also be the most uncertain advantage.

 

FYI you can still apply (via here at the bottom of the page, and then you need to email them afterwards). They appear to still be processing applications, albeit it can take a few weeks to a few months to process.

 

Please be aware these groups are heavily intertwined & cross promoting (maybe cross ownership interests?) from podcasts so be aware you are effectively hearing strategy from the same person (Michael Yardley).

Their strategy (from podcasts) seems to be solely blue chip (generally lower yielding) and ridicule other strategies as “higher risk, lower growth”.

Many others on here have achieved very good results with various different strategies to MY.

@datageek also has some myth buster posts which seem to indicate from his data research (very extensive) that growth is very similar inner & outer areas but results will depend on when you buy in the cycle if you have the same total $ exposed to the market. Also research ripple effect.

Long story short, as others above have mentioned there are many ways to achieve results with different strategies so keep checking out other advisors and strategies that suit your situation & goals.

Good luck!

 

In trying to understand your attached excel sheet, on the "main sheet " Net Cash Flow or S5 where does this cash come from.

 

How did you calculate the cash on cash ROI?

 

With your new builds … do you use a home builder company or are you the owner / builder? Also, where are you doing the builds ?

 

I use mid to large builders

 

Cool … new or established suburbs ?

 

Only well located new suburbs....established suburbs too much mucking around... Less profit unless you bought well under the market

 

As suggested by few I`ll focus to reduce taxes while aggressively buying properties at max LVR IO. If you buy well in 15 years time you paid no principal, portfolio doubled, sell half, live with the other half. Share will be set and forget. Both require a lot of time and risk management, you can get there but it is almost a second job and requires a lot of skills. With that amount of money an answer could be also land subdivision but again, not easy, lot of time & skills needed.

 

So it's fair to assume you made most % on RE/property, then developments then eventually diverting now cash to ETFs and Super?
Wouldn't you stick with what you specialize and made you financially wealthy?

 

Properties a more hands on approach. Next 5 years will have 16 to 19 places paid off and more than 70%
New. Still will be 80% property and a couple of mil super and ETF

 

Ok that puts it more into perspective. We have already created that in SMSF for each member some time ago, hence no need to sell really AND/OR divert more into that entity.
In addition we have also invested in different entities years back too.
I think having at least three alternative passive incomes helps, I try to instill that into younger adults or family so when one dries up they can rely on other incomes.
We are working more towards exist strategy whatever that means?