How to Retire Young and Have a Good Passive Income Stream?

What is something one can do to achieve financial success without putting hours on end to achieve it? (I work 60 to 70 hours a week and merely earn about 87.5k

  • I have an investment property
  • I have a modest car
  • Holiday overseas yearly

I'm 26 and I know I have accomplished quite bit
** But I feel that I am reliant on working like this to support a good life**

How can I achieve FINANCIAL INDEPENDENCE and have a good PASSIVE INCOME without costing my health as I work 7 days a week and I really have to life really…

I hope someone on here can guide me in a direction where I can focus the hours to begin with and step pack and see that I can travel the world and still have a decent income stream like 70 to 100k or more :)

I have thought of buying:

  • Positively geared properties again and again to increase the passive income stream
  • Starting a business (Cafe, bubble tee like Gong Cha franchise, Boost franchise, Anytime franchise)
  • Importing goods from China and going to China to find good suppliers
  • Creating a brand and connecting with instagrammers, facebook influencers to sell fashion products (designed in Aus and source from China)

P.s. Not interested in USANA, Amway or any pyramid schemes

Poll Options

  • 7
    Buy into a Franchise
  • 8
    Connect with Social media and create a branding
  • 112
    Positively geared properties again and again until I achieve success

Comments

  • -4

    hmm, not sure if ur 87.5k is per week or per year

    i retired at age of 29, when i achieved more than 3 million assets
    i still be able to enjoy my life now, with avg spending 15~30k per month, and still can keep topping up my saving in bank and increase my investment.

    • +5

      I retired at 25 and live off my 6 million in cash. Each year I buy a new Toyota Camry as they are the best car on the planet.

      • +5

        I wasn't as lucky. My dad only gave me a $1 million dollar loan. I had to work harder. I invested and had to declare multiple bankruptcies along the way. I learnt much and acquired a huge portfolio. I think I'll start running for prime minster this coming election. Get my hair redone too.

        • +1

          I'll start running for prime minster this coming election.

          Why wait until next election? The other politicians don't!

        • -1

          @rompastompa: Too funny!

        • -1

          @rompastompa: Yes you're right! With my riches I can buy my votes, tag Scott Morrison out and us pollies can enjoy our annual pension funded by the Australian suckers!

    • Per year :)

    • +2

      I retired at 26 after inventing a perpetual motion machine that I use to make electricity to run a bitcoin miner. I got bored counting my money so I got back my old job and just go to work to annoy people.

  • +4

    Check out the Financial Independence (FI) Australia subreddit:
    https://www.reddit.com/r/fiaustralia/

    But it all boils down to cutting costs, saving, invest in ETFs and/or property, set yourself a clear financial FI target (e.g. $2m net worth by age 40, married, no dependants) and work backwards from there.

    Definitely don't bother with any of that other stuff (franchise, social media marketing, importing goods from China).

    • Thank you for your help! I will look into it!

  • +1

    I guess one day working 7 days of the week will pay off but this is the time of your life you will never ever get back. You will never have the energy you do now.

    No matter how much money you have. Each to their own i guess.

    Good luckk

    • +1

      I understand that completely! That is why I am looking for something that can support me (passive income stream) where I establish it in hopes to be financially free!

  • +6

    Each time you have the urge to purchase a "deal" off ozbargain, put that money in a low cost index fund instead. Probably retire in 10 years.

    • God suggestion!

  • sell drugs or become a politician one way or another you're still a criminal

  • what job do you do I want it

    • +1

      Seriously? Have you actually thought about it. $85k for 70 hours of work a week. Almost any job would pay that.

      Minimum wage is $719.20 per week for 38 hours. The difference in hours between 38 and 70 is 32 hours paid at a minimum of time and a half for the first 2 to 3 hours per day depending on industry but let's say 3 hours. I would then estimate half the extra hours are being paid at time and a half and the other half at double time. That adds another 56 hours of pay at minimum wage. Adding that together means the OP would be getting 2.5 times what everyone else gets for a 38 hour week. That's at least $93,000 per year….but the OP only gets $87,500 so they're not being paid enough.

      • +1

        No, I have not thought about it.
        MMmmmmm not so appealing after all. I could never work that much

      • @mysterytal that is currect! I need something that could be similar or more in income (hoping to be financially free in future)

        • how about something with a bit less income say 75k which is still good and working 38 hours a week instead of 70!!! You would pay less in tax and be way happier.

    • A below average job that requires a lot of hours for little pay!

  • +2

    Crytocurrency.

    • That is going down hill though..

  • Invest in yourself

  • Just for general information re Superannuation.

    Currently there is a limit of $1.6 million dollars that can be put into Super.

    If you retire at 60 and have this amount in your Super your annual return will be $64,000 per year tax free.
    Typically people around this age have $300,000 to $400,000 in super so their income will be $12-16,000.

    I doubt there are many other options - think about how difficult it is in even saving $1million and what will you do with it

    In the not too distant future the retirement age will be 70

  • Drugs and laundered money can only by you big screen TV's and grocery. Can't buy a Lambo with drug money or a house.

  • +4

    If it was easy, we’d all do it.

  • +10

    Hey mate, late to the discussion, you've got a lot of good answers so far. Just wanted to chime in. I've met a lot of people in my line of work that are scared of retirement and don't want to quit working at 60 or 65, I know people that have retired in their late 40's and early 50's but all their friends can't and they end up bored and returning to work. I know a doctor that practiced till he was 92.. The average age for Australian men to die is 76. If you smoke or overweight, alcoholic take a decade off that figure. You are very young, fantastic you have a great work ethic and the want/drive to plan for a better future, that is rare these days. But mate honestly do not regret it in years to come that you weren't out there chasing women in your prime. You aren't really earning that much to be honest, and my suggestion would be find another line of work and aim for 4 to 5 days a week max. Retiring early will slow you down and you might end up dying a lot younger than you think. Plan ahead but don't get hung up on it. Start dating women and spending time with family and friends. Do the things you love while you are young and healthy, lot of people don't travel much after 50 years old because of health reasons or their partners health. The years go by fast and that little bit of extra money you had doesn't do much for you. Invest in yourself and experiences in life while you can. Health is greater than wealth. Look after yourself, you sound like a good kid, but don't over commit yourself.

    • +2

      exactly, this guy is too thick to realise

  • Become a builder and then property developer.

  • +1

    85k for 70 hours a week? You must be a lawyer.

  • +2

    I agree with some people here about investing in yourself.

    Spend money to learn about who has done this in the past - connect with them and get to know them, how are they doing it?

    Grow capital through business or property or shares and invest in high cashflow properties - 8% return is not uncommon - whether it is commercial property or regional town.
    So If you have 1.25M invested in these properties, your passive income will be 100k p.a.

    How do you grow the capital quickly? Doing business or property deals where you are adding significant value.

    I have a dentist friend who also invested into property - he retired at the age of 35.
    He set up a dental practice in regional town and sold after a few years. During that time he also purchased properties which grew in value - also fortunate that Sydney market boomed in the last 4 years or so. He sold many of his properties and cashed in to have a big amount of capital.

    I'm currently doing a property development deal where the profit is around 600k. It is taking around 3 years to do this, but it can be done quicker.
    I also know a number of people who have done property deals where you make a significant profit in the capital which can be reinvested in high yielding properties.
    Renovation can be quick 6 months and can turn around $50-100k depending on the deal.

    Anyways, going back to the start, I would highly recommend investing in good quality education and learn from those who are doing what you want to achieve.

    Also, I'm learning that retirement should not be the end in itself because retired life can be boring if you are not driven to ultimately make a difference in the lives of others. There is only so much travelling, Netflixing, gaming, partying etc you can do.

    • +1

      Uhh, just on the property piece, if you got 8% (and that isn't easy by any means) your GROSS income from the property will be ~100k p.a. There will be costs in providing that property to some (commercially a fair bit of cost)

      Your dentist friend isn't exactly retired at 35 because he bought property, he just had massive free cashflow to direct into an investment vehicle. Just turned out of you did that in the last 10-15 you probably made 100% gains.

      if you are in the midst of doing a property "development" how do you know what your profit is going to actually be until the thing reaches practical completion/sold?

      • The idea is to own the properties with 1.25M outright so that the cost of maintaining can be extremely low, but yes, it can be less than 8%.
        So if you want to achieve 8%, maybe 1.3M or 1.4M. If you build commercial property, you can achieve 8% NET profit after all costs. It's just a matter of working backwards. Some regional towns can be had for 9-10% yield and 8% net.

        Correct about my dentist friend - he has a strong cashflow business so he could borrow a large sum of money which he could invest into property. He also led a fairly frugal life and didn't spend much money on himself.

        Profit is not realized yes, but conservatively in our feasibility study, it is about 600k. You have to run feasibility studies so you have some idea of how much profit you can gain conservatively. If the numbers don't make sense, you don't do these deals…

  • +1

    But seriously, if you want to retire early and don't want to take a mammoth risk, you need to redefine what your life in retirement is. It isn't easy to just build up a 70-100k passive income stream or everyone would do it.

    If your life is to live in a nice rural town, in a modest house with a modest car, do domestic travel and cook at home all the time and not need the latest life gadgets, you could get to retirement quite early. But barely anyone does that. Everyone runs that treadmill until they can't run anymore or got rich tryin'.

  • +5

    Your goal here is an exception to the norm, especially to achieve it at a young age. So you will need to know that most answers even the most upvoted ones are not going to be the best ones because the majority of people haven't actually achieved your goal and don't know how.

    I achieved a 6 figure income by the age of 25 and from then on only had to work 2-3 hours a week which was location independent.

    There are many ways to achieve your goal but I think it all starts from the same place. Invest in yourself and leverage.

    Rich people are rich because of leverage.
    They leverage other peoples money (loans), other peoples knowledge (having an accountant, lawyer, etc), other peoples time (having employees), other people's systems (franchise, software), other people's influence (joint ventures, cross promotions, celebrity promos).
    You're working so hard and your earnings increase linearly because you aren't/cant leverage.
    That's all great but from an employees point of view, how do you even get to the level where you can take advantage of high level leverage?

    Invest in yourself. You need to become someone who can deliver high value in one area of the market. It could be importing things from China, but it's not going to work for you if you don't become the top 20% of people doing it in some niche. So get yourself there you need to grow as a person. Read books, find a mentor, test and fail in ways that don't cost you so much, put yourself into a job where you can learn the lessons but don't take on any of the risk (a job in a startup).

    Now imagine you've grown into someone who can source products in a particular few industries from China at low cost and excellent quality. You could then try to extend your skills into marketing and selling those products in Australia through a website or perhaps straight to businesses. If you succeed in doing that you could find some way to scale it up further, employee a few people to do the key tasks, put systems in place to make sure it runs as smoothly as a mcdonalds being run by teenagers and then just watch over it. Good chance of many fails along the way because you don't know what you're doing at first, but if you had a mentor to show you the ropes or worked for a successful company that was doing such a thing then you would be much better prepared.

    It's a fairly big commitment (startups are very hard), but if you find the right people (to teach you) and have the right attitude things can fall into place quite quickly.

    On the other hand, if you've got some money to invest, you could buy into a stable business that's currently for sale in the market. Usually the previous owners will give you training. As long as you know how to value a business and know what things to look out for (unlikely without experience or a mentor to guide), then you can buy a business that could eventually be set up to run without too much of your own involvement. Looking at 200k-500k minimum investment I would say.

    I invite questions if what I have said resonates with anyone.

    • very interesting, thanks for sharing - what type of job requires only 2-3 hrs a week, location independent generating 100k+ income?

      Who is your mentor and what are the leverages you have used?

      Any good books, training, mentors, courses, that you have used which made you who you are now?

      • +5

        Hey T3t5ujin, I read your comment earlier as well and loved the fact that we are on similar journey's and especially the idea that retirement isn't the end ;).

        The "job" is a high performing business (for me retail). Hypothetically, if a business earns enough net profit (let's say 200k) with you running it, you can trade some of this profit for your time back. You would need to simplify and systematize the processes enough so that everything is predictable and reliable. Then find some good people to run those systems. Imagine a 7 eleven franchise store, they only need someone to be the cashier, do the stock ordering and restocking the shelves. It's quite a simple business to run. If you can set up something like this that's profitable enough (the harder part) then you're set. For me it was taking a severely under performing retail business and turning it around, but then you'd need the skill to do it and to spot the opportunity. (invest in yourself)

        Better passive income (because it's more passive) can be achieved by buying assets such as property and taking rent or buying the share index and taking dividends. It just takes much longer to get there because you have to have far more cash in the first place. The other thing is you don't have as much control over it's growth where as in a business if you have the skill you could quadruple the profit in a short amount of time.

        I've read many books/resources, but I highly recommend these resources:
        The E-Myth (for getting into business)
        Roger Hamilton's materials including:
        Wealth Dynamics Test (for determining your wealth creation strengths and weaknesses)
        Wealth Spectrum Test (for determining your current level of wealth and how to move through each stage beyond and what is likely to be holding you back)
        The Financial Freedom Formula - written by myself + my mentor Elphie Coyle. (happy to send a free copy if you pm me interest)
        The 4 hour work week, primarily the concept of testing and 80/20.
        Landmark Education (world wide education company) - gives you power to just get things done and overcome limiting beliefs
        Rich Dad Poor Dad/ Cash flow Quadrant - invest in assets, don't buy liabilities

        My mentors include my family, many books and online videos/course, and most importantly, Elphie Coyle who achieved financial freedom at age 23 with no help from parents.

        Edit: You can find a good mentor by courageously breaking the social norm and approaching a person who is successful in a certain industry that you'd like to be in and asking what you can do in exchange for their time. I did this with Elphie as well as a high level sales person called Jan who approached the company I was working in at the time to sell his products.

        • I cannot pm you but would love a copy of your book. Thanks.

        • I'd love a copy of the book!
          Is there an audio version by any chance too?

        • sent. No audio version..
          Not sure how to change the settings to allow people to pm me..

        • I would also love a copy of your book.

          Any recommendations for retail business management skills?

        • I'm also really interested in early retirement and trying to gather a bunch of different perspectives.
          I would love a copy of your book. It sounds like you'd offer a different perspective to the usual invest in ETF.

        • The Financial Freedom Formula

          You haven't enabled PMs, but I'd love a copy of your book as well please. PM me ;)

          I just finished reading

          George S. Clason - The Richest Man in Babylon

          (best book I've read all year) so looking for a new book.

        • Bit late to the party but can I get a copy of your book as well?

        • +1

          @idonotknowwhy: Thanks, I've enabled it now. Sent book.

        • +1

          @Superannuation: There is so much to learn, some from educational resources and some needs to be learn from experience.

          The Emyth is one of the best books for this.
          I recently learn a fair bit from Dan Lok - https://www.youtube.com/watch?v=Cdlc6aUixlM&list=PLEmTTOfet4…
          Learn about people: Roger Hamilton's Wealth Dynamics Test, and Dale Carnegie's How to win friends and influence people.

          Each person will have their management style, you can learn that from Roger's test.
          Someone else's winning formula will be your losing formula.

        • I couldn't send you a PM either. Could I please get a copy of your book The Financial Freedom Formula?

      • Is there anything that you've come across that you highly recommend?

        • I love books by John Maxwell - Intentional Living is worth a good read/listen.

          Thanks for your all your recommendations - I'm going to check them out!

          I'd love to PM you, but I can't.

        • +1

          @t3t5ujin: The book sounds good already just by the title!

        • @iTzPossible:

          can I please have a copy of your book too? :)

        • Can I also have a copy of your book? Thank you!

    • Can I please get a copy of your book?

  • Before reading mine you must read itzpossible’s comment above. Absolutely wise words

    You work hard. Very hard. This is great because you cannot ever teach “will”, “skill” will come with time. Always be learning new skills to help you be better at what you do. I work stupid hours and you put me to shame, I however have grown into a very different tax bracket.

    I was not born wealthy, I have worked my butt off, but this took time, I have 7 years on you and I have not for a second thought about stopping. The thing I have learnt is you make your own luck, you have to hustle, grind, make waves and sell your brand until you are noticed and eventually the money will follow. Never burn a bridge on the way out of roles, move roles every 12-18months and always remain humble. A very clever man I worked with once told me “every no you answer with, is you saying no to a learning”, I lived and breathed this until I began to elevate and grow my business maturity.

    Question for you, are you still the “doer” in your role? Or are you the strategic thinker? Until you take your experience and begin to steer, wear risks and take leaps, you’ll hit a cap. If you really think there’s no more in your industry maybe it’s a sign your business maturity is not elevated to a point where you are making the most of what you have, just yet.

    Do you love what you do? I’m going to assume not by the way you have gone online in an atempt to have a bunch of strangers help you build a plan to get out. You need to find something you love, you’ll never work a day in your life then!

    Finally, What’s your strategy? I know you want passive income, but how? How much money do you need to enable it? I want to travel… I know I need $x saved to be able to go on the holiday we want to, so I’ll save by bringing lunch into work and skipping my arvo coffee until I get there… Unless you have a clearly defined strategy you will not know what five years from now looks like, that’s a problem because every decision needs to take you one step closer to that. The very real fact here is… no one wants to work to 70, what you are asking in this post is what the fortunate 5% can achieve. You need to become that 5%, either in smarts or money.

    My strategy for the last 15 years was an additional property every five years. My strategy for the next 15 is family and a steady (and high) income to support. All this in a dream will mean I could dial back my work soon after and live a happy life. My decisions will continue to get me one step closer. No guarantees, but I have a plan.

  • +1

    Realistically marriage to a foreigner is your best option for early retirement and international travel opportunities. Our friends (insert favourite race) arrive here with parents income. Often this income is cash income obtained through bribery. Essentially this allows you to be part of a cash family, no visibility to your existing Australian investments.

  • +2

    You obviously need a high yielding investment. If you have around $80k, I know someone who can point you in the right direction.

    • +9

      getting a bit old

      • +1

        It will never get old

    • Actually in this book:

      https://www.amazon.com/Millionaire-Teacher-Wealth-Should-Lea…

      The Author as well as one of the millionaires discussed, buys used cars, drives them for a year, and then sells them for a profit :D

      • I had a friend do that in Singapore - but that was because he bought when COE was cheap, and sold when it was worth more.

  • Just do what I did and invest in an index fund such as the ASX200 or the SP500 which takes all the guesswork out of selecting individual share and you get a passive return of approximately 10-15% pa depends on your risks aversion.

  • Why dont you ask me to give you the meaning of life too

  • Crime.

  • Not sure if someone else has suggested this, but I suggest to see a financial advisor/planner. My advisor/planner is through RightTrac Planning https://www.righttracplanning.com.au/ and I've been really happy with their service so far. They have already helped me heaps financially and I'm not yet 30. I'm happy enough with their fees which I feel like are more than reasonable considering the returns on investments. Even though they're based in Toowoomba, they use Zoom for online meetings.

  • BTC, XLM, EOS

  • +1

    I'm retiring in Malaysia. Retiring in Aus is too expensive for me. :D

  • I'd say it's a case of trial and error in finding that passive income that suits your personality and skills area (and potential skills area). We all (for the most part) want to stop working and enjoy life the way we want - whether retirement, more time to travel, more time with family, stop working for the 'man' etc.

    My recommendation is to grab yourself a mentor (someone who is actually successful, not just someone that preaches on how to do it) in the financial area you want to expand on and/or develop. You may unfortunately need to fail at some fields to know which suits you.

    As others have actually said, set yourself financial goals and timeframes. Mine, like yours, it to retire early and indeed I've now got enough passive income for my wife to stop working. I'm still working on covering my salary. I have two streams of passive income and both work for me, but I also know that one or both don't work for others.

    Also manage your time - you work 7 days as it is now and most, if not all, passive forms of revenue require time input either at the start (to setup the system) or on-going maintenance.

    • If you don't mind, what are your passive income streams comprised of? What sector? How did you build it?

      • Combination of property and MLM. Both took time to build, nothing comes quick, but wife is in a position where she can not work and look after kid.

        With anything you do, as long as you treat it seriously and get the 'right' information, it will have a higher chance of giving you a return.

        I know most will frown upon MLM, but it works for me. I treat it like my business, not a get rich quick (which others may present it as), and manage my and my team's expectations such that we achieve success.

        Invest in yourself and whatever venture you pursue, you'll be in a better position to absorb the info and any mentor guidance.

  • +1

    I dont know why people always try to find the easiest way to be successful… im only 23, worked my ass off fulltime since i was 18 and have only just got a mortgage single handed and i am still feeling like i have a long way to go even though i don't know many people that can say they have their own place.

    Work your ass off is how you live a good life. One day it will pay off.

    People "living the good life with get rich quick schemes" and not living within their means are usually the ones going broke before they're 30.

    Live day to day. Work hard and enjoy life as best you can. One step at a time.

  • Just as an aside on the Capital Gains side of things, we're currently renovating one of our rental properties and wondered whether to sell or continue to rent it, so we asked for clarification on Federal Labour's plans regarding CG if they get in next election, (this was at the end of July after they won the by-elections).

    The Office of the Federal Member for our area, (Chris Bowen), replied that the current 50% discount you receive on any Capital Gains would be reduced to 25%, (ie. you would have to declare 75% of any CG profit instead of 50%).
    However any investment owned now or made prior to the federal election would be 'grandfathered' in at 50%.

    Naturally this is assuming they win and can get the legislation through but just another possible factor to throw into the mix regarding retirement strategies.

  • Convert to Islam, become a polygamist and go on welfare along with your wives. The government may overlook the fact that you are white and therefore useless to them for the purpose of chain-migrating dozens more non-whites to Australia.

    Opening a Mosque or Islamic school and pocketing the funding the government will eagerly throw at you could be another get rich quick scheme.

  • Always remember when seeking opportunities that 'Where there is muck, there is money'. I met a guy in Singapore 40 years ago. Poor as a church mouse. Met him years later. Made a fortune cleaning oil tanks on ships and had 150 men working for him. No one wants crap, so there is money to be made dealing to it. Hope it helps and all the best!

  • I like my job.

    There are many side benefits of working; you feel valued, you contribute meaningfully, social interactions etc.

    But, it has to be a job that you enjoy.

    I’m doing most of my travel now because I reason when I’m old I probably won’t be as capable of solo slightly-adventurous travel.

    My advice is to find a job you like that allows you time off to travel.

    Working many hours for little pay, imo, is no life. (Even with the promise of financial security in the medium term).

  • interesting topic

  • this guy so caught up about money money money. go enjoy life mate. get a different job making 70k a year. you can still pay off an investment property and live. you will work 38 hrs instead of 70 hours (which is just a joke I feel sorry for you). Stop being thick and worrying about money so much, your whole life is focused only on money, I feel sorry for you in that aspect too. poor mindset

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