Why one millionaire failed at early retirement

Discussion in 'Financial Independence, Retire Early (FIRE)' started by geoffw, 22nd Dec, 2019.

Join Australia's most dynamic and respected property investment community
  1. geoffw

    geoffw Moderator Staff Member

    Joined:
    15th Jun, 2015
    Posts:
    10,806
    Location:
    Canberra
  2. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    35,830
    Location:
    Australia wide
    Interesting articles, The poor rich *******s can't live off $250,000 per year in passive income plus the income from his website - which the article is a big plug for.
     
    Kelvin Cunnington likes this.
  3. geoffw

    geoffw Moderator Staff Member

    Joined:
    15th Jun, 2015
    Posts:
    10,806
    Location:
    Canberra
    It must be terrible to be so rich.

    Though he chooses to live in an expensive city, and probably a very expensive part of the city. That's a part of what he wants in his retirement.

    I'm surprised about him relying on commercial interest for his income.
     
  4. SatayKing

    SatayKing Well-Known Member

    Joined:
    20th Sep, 2017
    Posts:
    9,222
    Location:
    It's All About Me.
    Does he get money from people who simply click on the site? If so he just got 2 cents from two who post on this site :)
     
  5. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    8,410
    Location:
    Gold Coast
    Lesson I got from the article:

    “Don’t retire if you are immature”​
     
  6. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    10,501
    Location:
    .
    Most of these sites are a great con in my view marketing a dream to gullible early retiree wannabes. In fact I doubt many of these blog writers would be able to continue to afford genuine “longer term” early retirement without the income from their blogs:rolleyes:.
     
    ellejay and kierank like this.
  7. sash

    sash Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    12,682
    Location:
    Sydney
    Yep....spot on....same as some of the Aussie ones who have created a income based on other businesses...they might never retire either.
     
  8. euro73

    euro73 Well-Known Member Business Member

    Joined:
    18th Jun, 2015
    Posts:
    5,692
    Location:
    The beautiful Hills District, Sydney Australia
    Lesson I got - a lump sum of 2 million probably won’t be enough to maintain a 6 figure retirement /standard of living in an ultra low rate environment if you want to avoid eating into your capital during retirement. Especially if we also enter a lower dividend environment , which I believe is likely as company earnings plateau .

    There are lots of comments throughout multiple threads , going back for years and years , about converting post CGT profits from capital growth into vehicles such as ETFs and LICs and routinely generating 5-6% net , which would convince many that 2 million invested that way is enough to generate 100-120k net for life . I just question how many will ever get close to making the 2 million in the first instance - you’d need close to 3 million in pre CGT profits to walk away with 2 Million - and if they do , whether this can be relied upon for the entirety of retirement without needing to draw down capital along the way . People live a lot longer nowadays

    I guess we also have super - Americans don’t. 401k isn’t quite the same . But still, it makes you realise you need to generate more than 1 bucket of income for a comfy retirement ...
     
    Last edited: 22nd Dec, 2019
    kierank and TAJ like this.
  9. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    10,501
    Location:
    .
    At least some of the other businesses might actually contribute something useful productivity wise.
     
  10. sash

    sash Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    12,682
    Location:
    Sydney
    No not likely.....;)
     
  11. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    10,501
    Location:
    .
    In that case tell them all to get stuffed:D.

     
  12. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    24,330
    Location:
    Sydney or NSW or Australia
    What a load of bollocks. $3m of investments and only $80k return, shows that this guy must be very conservative with his own funds.

    How can a $1.6m median price house require >$300k income to support? Definitely not the case in Sydney.

    • Didn't plan on kids or budget for one (or more)
    • Decided to refinance the loan on PPOR, no brainer
    • The joys of employer-funded healthcare model - now it comes out of his pocket (possibly need to shop around, he's young and could afford a higher deductible and lower premium)
    • Not planning for retirement - ie what are you going to do for 12+ hours/day.
    • Goes against his principle of investing more than 35% in property. Why are the other assets performing so poorly in a US economy which is booming (according to their fearless leader)
    • Magically discovered if you cut costs, they'll survive (cheaper location, lower school fees etc)
    He was an investment banker, just hasn't applied the work principles to his own investments to achieve the retirement that he wants.
     
    Piston_Broke and kierank like this.
  13. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    35,830
    Location:
    Australia wide
    Not sure if he is, but prob just threw this in to make it sound worse than it is.
     
  14. lifecompetitor

    lifecompetitor Well-Known Member

    Joined:
    8th Dec, 2019
    Posts:
    96
    Location:
    Sydney and Melbourne
    I’ve dealt with quite a few investment bankers in my time. They may be different today but back in the day I met some classics who had a different level of confidence/arrogance.

    I was considering doing a capital raising for work, before I finished my sentence investment banker jumps in with ........

    I don’t get out of bed for a deal under $50M how much is this deal?

    I didn’t get a chance to answer before he followed up with....

    I only travel business class and we would need to go to Hong Kong, Tokyo, New York etc to do 6 monthly investor briefings.

    Less likely this brash type of conversation happening today but it gave me such good stories to tell and I actually miss seeing the Gordon gekkos of the world. He had the full pin stripe suit plus slick back hair going too. Brilliant.

    Off topic but the words investment banker just brings back some fond memories.
     
    Bunbury, Shazi, ellejay and 3 others like this.
  15. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    5,625
    Location:
    Mt Druuiitt
    When I opened the article and saw the photo of the man and his son wearing a flanno shirt I knew straight away why he failed.
     
    lixas4, Shazi, TAJ and 1 other person like this.
  16. sash

    sash Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    12,682
    Location:
    Sydney
    Yep....let dem suffer in their jocks! :p
     
    datto and Nodrog like this.
  17. sash

    sash Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    12,682
    Location:
    Sydney
    Yep....100% agree.....no flanno shirt....no ughs....no mullet...no durie.

    On a serious note...have to laugh when I hear some people carry on about needing 200k plus....to retire....in todays dollas......that may take till them working till 70. A lot won't get off their proverbial to get there....or try to get eduated. Instead they are happy to leave this in hands of so called experts...like BAs ...Financial Planners.....Mortgage brokers...you can't outsource this stuff.
     
    BunnyXiao, The_Billy, Shazi and 2 others like this.
  18. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    5,625
    Location:
    Mt Druuiitt
    So true Sash.

    If only that failed investor, Sam D, had splashed that $3m into the Druitt, he would have at least doubled his money by now.

    Oh well, you can't go back. He'll probably build up his wealth again and make the same mistakes.........then he'll start a new blog lol....."How I failed twice as a middle aged divorcee and paying child support due to extramarital's".
     
  19. Bunbury

    Bunbury Well-Known Member

    Joined:
    16th May, 2017
    Posts:
    427
    Location:
    Melbourne
    It all appears a bit of a humble brag to me. 'Oh, I've failed because I need $300k to live on and I only have $250k.' Meanwhile, traffic to his blog probably has a bit of spike because of the attention.
     
    Shazi, Westminster, Sackie and 5 others like this.
  20. euro73

    euro73 Well-Known Member Business Member

    Joined:
    18th Jun, 2015
    Posts:
    5,692
    Location:
    The beautiful Hills District, Sydney Australia

    Its also a very American article. Dividends arent a thing there like they are here... they dont have Neg gearing for INV debt, and they dont have universal health care ..... so their after tax cash gets used in ways ours doesnt necessarily.... still, having said that - if you cant make do on 250K USD per annum with 1 child, you are trying to live like a Kardashian ie a pointless, excessive, vacuous existence ;)
     
    Soul, bobbyj, datto and 1 other person like this.

PFA Property Expo is designed in a way that visitors can gather maximum real estate knowledge with added benefits. Different speakers will be presenting on different topics as where to buy, when to buy in this market...