Playing with FIRE

Discussion in 'Financial Independence, Retire Early (FIRE)' started by Redwing, 14th Oct, 2018.

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  1. Ian87

    Ian87 Well-Known Member

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    My thoughts exactly. Time is our only non renewable resource. And the compounding takes a while so why not coast along until it gets there.
     
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  2. chindonly

    chindonly Well-Known Member

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    Interesting blog. Makes sense, but I don't know too many people that can earn $100k a year just working a couple of days a week and over an extended period.
     
  3. Redwing

    Redwing Well-Known Member

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    Nice....

    From Mr 1500

    Performance Update (Day 2221): First $100,000 Month!

    January (2019) was a big month for Mrs. 1500 and me. Our biggest ever. For the first time ever, we gained over $100,000. In a month. To be precise, we’re worth $100,513 more on 1/31 than we were on 1/1. Yowsers

    • Mr Market: In January, I binged on Game of Thrones, spent time at the beach in Florida, ran at the gym, attended parties, and spoke at Camp FI in Florida. While I did all of that, my portfolio went bonkers.

      About 25% of this gain was due to Facebook which took off like a SpaceX rocket. Before we take a victory lap, much of the $100,000 gain was just a rebound or reaction to a poor December. That month, our portfolio dropped $62,668. After the dark comes the dawn. December was dark, but January brought the light.
     
  4. Redwing

    Redwing Well-Known Member

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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    What about the FINR movement - Financial Independence Not Retire.
    Some like to have FU money and continue working.
     
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  6. Lacrim

    Lacrim Well-Known Member

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    GiddyHideousGuanaco-size_restricted.gif
     
  7. Lacrim

    Lacrim Well-Known Member

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    I know what needs to be done - I'm just not comfortable converting so much equity (and the extent of selling down required) and dumping it on the stockmarket. Irrational fear?

    How to get the best of both worlds without LOE or some degree of it? Seems lie arock and a hard place at the moment.
     
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  8. Snowball

    Snowball Well-Known Member

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    Maybe do it a bit at a time like I am.

    Sell a property every couple years to live on plus steadily build your share portfolio.

    Helps reduce CGT, less pressure making decisions with big money and your share portfolio grows along with your knowledge and comfort level so you can make any adjustments as you go.
     
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  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Perhaps you could combine this with the substitution of security to keep loans open and then debt recycle these into further property or share investments.
     
  10. Lacrim

    Lacrim Well-Known Member

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    So you'll living off some of the sale proceeds and investing the excess (assuming there's any left)?
     
  11. skater

    skater Well-Known Member

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    I'm also slowly converting some to shares. It's a scarey new world, but prior to Hubby retiring we sold off one a year for several years, putting funds into offsets, giving us a decent income. We're now slowly drawing down from some of the offsets & investing into shares. Currently all IO loans are fully offset & one of the P&I ones gets a very heavy extra payment each month. So far, loan balances are decreasing AND share portfolio increasing, even though it's all borrowed funds.
     
  12. Snowball

    Snowball Well-Known Member

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    Yes. Just as an example, say you get $150k from a sale, this would be enough for us to live on for 2 years ($50k per year) plus buy $25k of shares each year.

    If you have a number of properties obviously this can be done over a period of 10+ yrs.

    We already had a low six figure share portfolio when we decided to stop work and transition completely to shares.

    As the dividends roll in you can use to grow the portfolio further and as dividends increase over time the cashflow will build quickly.

    Numbers and timing can obviously be adjusted to suit the situation, but if net worth is more than enough after selling costs to create the income required through shares then I think it makes sense.
     
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  13. Lacrim

    Lacrim Well-Known Member

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    Were you mortgage free in the midst of doing this?
     
  14. Snowball

    Snowball Well-Known Member

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    No we’re renting.
     
  15. Lacrim

    Lacrim Well-Known Member

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    So the $50K is including rent?

    Not trying to pry, but how much you live on, if you have kids etc are massive contributors to being able to retire early.
     
  16. Snowball

    Snowball Well-Known Member

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    Yep, actually it’s $45k for us, rent is $20k (Perth). No kids just one dog and he’s expensive enough lol.

    There’s an exact breakdown of spending and also investment strategy on my blog (which I can’t link) - if curious it’s Strong Money Australia - has been mentioned here few times.
     
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  17. Lacrim

    Lacrim Well-Known Member

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    Ah sorry didn't know it was you. I follow your blog lol.

    Yeah our numbers are virtually triple - rent alone is $40K pa. $70K plus for living expenses and $15-20K for two overseas holidays pa.

    Some would say that's indulgent even though it doesn't feel like it (apart from the holidays...I think its important to enjoy the journey rather than blowing it up when its too late).
     
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  18. MWI

    MWI Well-Known Member

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    This reminds me to share about our friends who came back from Qatar 16 year contract or so! Now they live in QLD, fully retired and self funded aged 46 and 58. They play a lot of golf so most older retirees ask what jobs they have.....? Well, my friend said after that conversation he realized he was a burden to the society... how can you be still in working age, not work, and not really do anything (they do pursue their hobbies and yes at first it was hard to live a life not working full time for an employee, especially when that's their background). His problem really was what does he say, he is retired? Most people assume others to be burdens to the society if they don't work in normal defined age by our society...but why?
    Reminds me the film, "About a boy", when Hugh Grant was asked what do you do, "I'm in between jobs, what did you do before....well, nothing really", he lived on royalties from family! Nobody wanted to socialize with him as if you do not do what most do, you somehow become perceived differently.
     
  19. almostthere

    almostthere Well-Known Member

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    wow, and how much savings are you able to make with that level of expenses?
     
  20. kierank

    kierank Well-Known Member

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    We have set our retirement budget at $128,000 pa, with $80,000 for living expenses and $48,000 for overseas travel.

    This just happens to equal the maximum self funded pension payments for a couple, namely:

    $1.6M x 2 x 4% = $128,000​

    Pure coincidence and totally accidental :D.
     
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