I decided to semi retire about a year ago, I've stepped down from a senior corporate role to do a simple role working 3 days a week. Best decision ever!
[AMA] Semi Retired at 34, Ask Me Anything!
jaseredpanda on 28/11/2018 - 13:44
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@jaseredpanda: How much does a knock down rebuild for a duplex cost? I have a similar sized property, maybe I should consider it!
@serpserpserp: about 705k not including architect costs with council etc and not with those masterton places
Exactly what i was thinking to do with my savings!
this gives me more confidence with the way you've done.
awesome work you've done so far by the way!
no assistance
Sounds like you got a sh*t load of assistance from the taxpayer thanks to negative gearing and stamp duty concessions.
Chillin222, stop being a bitter flog.
Sounds like you’ve achieved little and blaming it on someone else
@popcornready: I think it's pretty fair to criticise those who claim to have 'made it' due to the direct financial benefits of poor government policies? All the research on this topic conclusively shows that Aus tax settings and the housing boom has driven an immense creation of wealth to certain population segments, through no effort of their own.
Everyone gets “assistance” whether it be the roads we travel on, the police that maintain law and order, public transport, Medicare etc….
But to be clear negative gearing, stamp duty concessions is assistance too… but so what?…. like I said everyone gets assistance of some type or other.
But to be clear negative gearing, stamp duty concessions is assistance too… but so what
Specific tax concessions to investors cannot be compared to roads, the police etc. Poor people are also allowed to use the police and public transport.
@chillin222: So I should compare it to the middle class welfare dolled out by Howard, or the unemployment benefit or aus study or its equivalent.
To be clear the OP by taking advantage of those tax concessions is well within the law; is it morally okay is most likely an open question; which most likely will be answered in the next federal election.
To be clear the OP by taking advantage of those tax concessions is well within the law; is it morally okay is most likely an open question
I have absolutely no issue with the OP taking advantage of these; I don't even think there are any moral issues.
What I do have a problem with is the OP doing an AMA, implying they have leveraged their personal skill and judgment to achieve a particular outcome. It's just not the case, and it's dangerous because it leads others on who may see $$$ in their eyes.
It's essentially the old American dream problem; where poor people vote for tax cuts for the rich - in case they are rich one day. These things need to be called out for what they are.
I would suggest your parents provided you with a stable home life. Assistance.
Please correct me if this was not the case.
Very wrong my friend. My parents come from humble beginnings, in the end i helped them retire. They are really bad with money.
I moved out at the age of 22
@jaseredpanda: Thanks for the correction.
However, I would suggest living at home for 22 years is family support indeed; my friend.
@Eeples: You're welcome for the correction. I call that a normal family life. I don't feel like I left the nest too early or late.
@jaseredpanda: You said you were not assisted by your family.
Clearly you were; for at least 22 years.
But, sure hold on to your 'did it all myself' mentality. No worries.@Eeples: My mistake, what really happened was I woke up as a baby in the jungle. I sold some coconuts to the locals and made some money and slowly accumulated wealth. Now I can be the first person in the world to say I did it all by myself
Do you attribute most of your current wealth to the property boom from Age 26-34 (2010-2018)?
If there's a sharp correction in the property market, will you have to go back to work?
Yes I would attribute it being from that boom.
When I seriously considered leaving the corporate workforce I sat down with my good buddy and mortgage broker to crunch some numbers. Which included a big market crash and also interest rates doubling.
Because I have been saving and drawing some equity (my LVR was very low and is still reasonable low), I have enough cash to survive the next 10 years if I didnt change anything today. Which of course would be silly if I leave everything the way it is now and not adjust with the economy.
But in summary I would be fine, as I have a good cash flow with manageable loans.
Damn, no property boom early retirement for me then. 😔
can i borrow some money?
I think I won some instant maccas cash prizes not long ago. Free hash brown?
If he doesn't want it, I'll take it!
Did you just assume a random's gender?
@magic8ballgag: *themself
See, this gender anxiety has made you confused even about how many people a user is.
Well done on what you have achieved mate.. Amazing jumps in salary along the way.
Are you at all concerned of falling rental income if there is oversaturation of property or interest rate increases?If you needed the income or if you were bored, what part time job/career would you go for?
Thanks buddy!
I was at first, but sitting down with my broker (good friend) I realised it will be fine. I'm quite a risk adverse person.
My advice to people, if you can - build a granny flat on existing investments. So cheap and the return is crazy! e.g. 140k for a granny flat with 350 per week returns. It is literally paying itself off
I'm actually not sure what part time job/career I would go for. I'm actually a lost soul who never had an answer for "what would your dream job be?"… maybe i'll just work at jb hi fi so i can get discounts lol jk
maybe i'll just work at jb hi fi so i can get discounts
And have an affair with an 18 year old.
Are you still working at one of the big 4 banks?
And is your principal home fully paid off?No I left the big 4 banks… the politics is astronomically toxic! From executive manager to now a recruitment sourcer 3 days a week and never been happier. No meetings, no stress or after hours work. I plug in my earphones to listen to Joe Rogan podcasts all day
Principal home almost paid off, 6 more years!
Impressive effort. Well done.
Do you have investment other than properties?Thanks bud!
No I don't, besides a bit of company shares they gave me (not a lot)
I don't know much about shares or other things like cryptocurencies haha. Just brick and mortar!
I don't know much about shares or other things like cryptocurencies haha. Just brick and mortar!
Unless you have a big mount of money, and buy property trusts at 8% yield, it is very difficult to rely on the stock market for income. Property imo is still the best way to get an income (thats why I thought it was bad when the banks left smsf lending).
@Other: If you want income, you can always realise some capital gain. Thanks to the 50 % discount, that's much better than receiving dividends.
@jaseredpanda: First of all big congrats on the achievement. you should be proud of yourself. I have few questions tho-
When did you buy your first investment property ans what LVR for 1st one?
Did you ever visited a financial planner? (I know you love planning but still asking)
How many properties do you have right now?TIA
Exec manager
Oh the stories you must have heardYep! you would not believe some of the "power plays" other executives would do just to satisfy their own ego. Not to mention the cost cutting done (people that is) every year despite record revenue targets being met.
Did you job hop the big 4?
only from one of the big 4 management consulting firms to one of the big 4 banks. I then stayed in one of the big 4 banks for 6 to 7 years
Can you give us an example of toxic office politics that you experienced?
Hmm where do i begin!
I recall one EM as an act of dominance always made a lot of noise on his floor to show everyone on that floor that he was top dog e.g. stomping his foot because his foot was itchy and yelling that out really loudly.
Another one i just remembered was golden, one of my colleagues got frustrated competing with another team member so he became close with a senior leader who had influencial power. He then switched teams to a special projects division and ended up pretty much becoming the boss of our area (my boss included had to answer to him), well played… very well played…
my other friend an i who is now a teacher always said that we wanted to write a book about all the crazy things we saw
@jaseredpanda: "I recall one EM as an act of dominance always made a lot of noise on his floor to show everyone on that floor that he was top dog e.g. stomping his foot because his foot was itchy and yelling that out really loudly."
That's not office politics that's just simply being a prick!
On another note, why do people act like that???
@Homr: Lots of pricks
that guy did end up creating his own special unit and fired the boss who hired him and half the department when the project was failing. amazing how he pointed the finger at everyone else but himself.
Not sure, but i can see how easily it is for people to get sucked into the toxic environment. everyones protecting their own empire and trying to destroy or take over others. we used to call executive managers as "exit managers" always in the firing line
Are you a fan of the UFC?
I am! i used to do bjj and really appreciated that art form which i would call it human chess. it was so satisfying to defeat an opponent who was much larger than you. It really gave me a new lens too when i watched mma and i could predict what would happen next when certain positions happen.
i love gsp (despite him being called boring, he's just perfect and smart at what he does), jon jones best p4p in my eyes despite all this controversy about so called drugs - i mean the fact that DC is so dominant now in every way but was outclassed by jon jones… you would question what sort of beast is jon? also TJ dillashaw is just a smart fighter and a humble guy
@jaseredpanda: I'm not into physical violence but I love MMA for similar reasons. These guys are top athletes not just in their field but for any sport. They put their lives on the line and the dedication to their art is crazy.
I loved JJ before he even became the champ. Now I hope Francis Ngannou and Donald Cerrone get a chance to become champs (yes ANOTHER chance for Cowboy!).
@serpserpserp: oh yeah cow boy is fun to watch!
if you listen to joe rogan's pod cast with GSP - GSP actually hates violence and fighting himself… its hilarious
@jaseredpanda: I know a couple of really high belted martial arts type of people. They are all the same. Would use every other means available to them to avoid conflict
Congrats on your achievement mate. My question relates to the 70k you saved initially - Did you have more than 70k saved and only used 70k towards your house deposit? Or did you go full hog and essentially went broke by investing all your savings into a mortgage?
Thanks mate!
70k was all I had. I scoped out houses with land sizes above 500m2 with a frontage of 15 metres wide so I can eventually build a duplex, my budget was within the constraints of the first home owners grant.
I was a bit lazy and only browsed at a few places in lidcombe (sydney) that were selling for about 550k or so, within 6 months of my twiddling my thumbs I was priced out. So I went hard hunting and found a place for 450k (cheaper than I expected) and as close as I could have it to the city with 550m2 land and 17 metre frontage.
With stamp duty and all other extra costs, I had still about 20k or so left to hold onto. Over the next year there was no capital growth for my house which I was totally bummed about but eventually the price started peaking, I use the equity at that point not to build the duplex but instead by smaller houses even further out west in campbelltown when badgeries creek was announced for the new airport. The houses cost about 380k per house and now they've more than doubled with great rent. Plus granny flats added to them, its very good income
Very Smart. But, do You ever overthink & stress about bad renters ruining the place? A midnight call from agent about an expensive fix? A huge renovation cost when reselling?
Yes!
In fact that has already happened several times. At first when I started renting my place I tried to manage it myself, bad idea (well for me) I had some terrible renters who started falling behind on rent. Luckily I had my broker friend refer me to a great agent and within a week they were booted out. I've been using agents now to assist, some great and some very meh.
Regarding costs I have had some minor things to some major things, nothing so far has been catastrophic and worse comes to worse I am paying rental insurance in case I ever have to dip into that.
Most expensive fix so far was for a new air con.
Were you renting yourself with that first purchase? And what about now?
i moved in there at first and rented the other rooms for a little while. Now i live on side of the duplex and the other one i rent out
How many properties do you have now?
4 houses and 1 granny flat, another granny flat on the way
interesting..
What is your asset mix ? How much cash at hand ?
Do you include superannuation in your assets ?How have you insulated your investments against legislative, market changes or life change ? for example your will lose income when your partner has a child that you mentioned earlier..When you have a child your costs go up….and up…and up…
Cash at hand just over 300k, mainly from pulling a sensible amount of equity from my houses (still a low LVR) Just in case for a rainy day or to build more granny flats. Also since I have semi retired over the last year, it started off at 250k and now grown to 300k
I'm actually terrible with super, it goes to some vortex that I dont know anything about. I haven't accounted my super funds as my money at all for retirement, so that will be a nice surprise one day (or not lol)
I try and keep up to date with property news and my mortgage broker friend keeps me informed too. My good rental cash flow and amount I have in the bank provides good enough insulation for now, and during the next spike I'll be selling my PPOR so no tax there on profits and that'll provide even more breathing room by paying off mortgages from other houses.
Wouldn't your $300k be better off invested in a liquid asset like an index ETF than earning a pittance in a savings account?
Currently in an offset, part of the amount will be used for a granny flat. But I mainly like to keep a decent amount in case of a rainy day. I'm not too financially savvy with what an index ETF is, but I'm keen to learn!
@jaseredpanda: leave it in offset.
Access to cash (not 'liquid' investments that can fall) is just as important as return or more important when it comes to property.
OK..fair enough..I too avoid super like the plague, but thats more of a philosophical issue rather than not being interested. No point in including it in any planning when you may never get it.
Have you ever looked into a self managed super fund? I was sick of reading my super fund report due to the woeful gains. Pulled out all the money from all funds and me and my wife started a SMSF. Bought a house with it and plan to buy more. One of the better financial decisions I've made. Would be right up your alley as you like property, have free time and good with money.
That definitely sounds sensible to me! I'll need to look into SMSF as I have absolutely no clue about that stuff. Thanks for the tip!
How willing are the banks to lend to smsf ?
Great thread OP.
I'm looking at retiring early… Good on you for already being semi-retired.
Question. What what your savings rate in the past 5 years?
I actually have no idea, but rough numbers, 5 years ago I had about 500k networth and now 1.6 million. So about 220000 per year as an increase? but thats due to smart investments rather than savings. Its hard to keep track as my savings go up and down from buying.
Oh also if you don't mind me asking, what is your plan on retiring early? out of curiosity :)
Fair enough…
I've been tracking costs Vs income, and keen on increasing our savings rate, hence the question.My plan is simple. Work hard(er) / more now.
Do a big world trip.
Then find a 3-day workweek gig, possibly consulting, etc.
First aim is to eliminate the mortgage though, so still a few years left.
Hi OP, if you're not already subscribed to reddit's financial independence sub may be worth a look. Its full of people like you or with similar goals to you. Looking yo retire early that is. Your post there would be much appreciated :)
thanks i'll check it out!
link to the sub please
Really great AMA I don't have anything to ask but love the responses learnt a lot :)
Congrats mate. Lots of people like to nit pick when someone claims early retirement but you are living proof that it is possible to bust your ass early on and find a better lifestyle balance while you are young enough to enjoy it. I'm a couple years behind you but share the same goals.
Will have to seek you out when I hit my magic number and hear what you have learned since cutting back.
Thanks buddy!
yes happy to help, i feel like i still have a lot to learn! sounds cheesy but so far i've learnt to make the most of your days off, when i'm walking around on a monday you only see mothers with babies and the elderly around. It's great! Plus no line to get my hair cut haha
Once you achieve financial independence, you can fool around with trophy wives you met at the gym or cafe during the day, while their hubbies are hard at work.
Or so I've heard…
Lol personal experience perhaps?
Apart from role being simpler, did your role change much. Ie. Is it an entirely different company and role you have no experience at.
Or did you maybe just step down slightly from role, same company, lower position etc.
Also, aren't you bored with the simple role?great question!
role changed completely! I initially took a step up (probably too quickly for me) into an executive manager role for this analytics company. All was going well until work started taking over my life a lot more than just a few hours over time here and there. It got to a point where I was working until midnight each night and including weekends. Thats when I drew the straw… my performance at work started to crumble a bit too and I had a chat with my GM that I wanted to leave. She asked if there was anything she could do and I told her my plan on doing a simpler job part time 3 days a week. In the end I source people now, head hunter! (more cool than it sounds)
My role is to hunt people down from linkedin that have the right skills for our company and pass them onto the recruitment team to talk to them in person/phone.
It is a bit boring but I do get a lot of satisfaction bringing in a new hire into the company (1 out of 100 people on average). I like my work mates! (except for 1 who is jealous about my situation and calls me a slum lord), and I also get to listen to pod casts all day, I love joe rogan - you get to learn so much and about mental and physical health from his podcasts
I'm just a lot happier now and no longer have that stress of taking any work home or going to long boring meetings. The flip side is I did lose that mental stimulation, so hence I'm still learning how to balance that now with outside work things e.g. mentoring disadvantaged kids and i'm thinking of learning the guitar perhaps
Oh you're a recruiter? Is it good money? (I lot of the recruiters I know seem to make a decent amount of money sometimes for not much effort.)
Its decent money, and yes I am surprised too at the world of recruiters and how much some of them make! (not me though)
@jaseredpanda: From experience and from chatting to friend's who have landed roles from recruiters, they make a lot from filling certain (especially higher up/executive roles)! No wonder they keep spamming me on LinkedIn!
@dust: LOL! exactly right! you can switch that off on linkedin if it becomes annoying, but its really good when you're thinking of moving
Great thread, thanks for sharing openly OP. Good example for young bargainers and I guess an encouragement for us older ones to do some adjustments in life if we're not happy about it.
Thanks for sharing your success story OP.
What is your current port folio of property includes? And how many granny flats have you built on your property? What is your income now base on the rents you get?No problems!
At the moment 4 houses with 1 granny flat. I will be using my 4 days off to start planning for the next granny flat since the 1st granny flat was a test dummy. Wasn't sure what the appetite was for granny flat rental in the campbelltown area but it has been great.
Gross weekly rental income is about 2k, net weekly rental is about 500 or so roughly
All in NSW? If so, land tax is a killer isn't it?
Yes all in NSW, it really is! helps to have a good account and a depreciation schedule in place. I was very noob when I first started
So assuming the granny flat is built on a property which already has existing tenants, do you rent these out to a different set of tenants? How does this? Also well done on your move. A Lot of people will think about it, but very few would do it!
Yes I rented them out to different tenants but I did ask the existing tenants whether they had any family or friends in mind as it'll make life easier. They had a friend who was interested but that fizzled out and we had another lady move in.
@macrocephalic: It's actually quite spacious, I had a good architect who is familiar with this council, so even the yard is huge with an outdoor patio bbq area. Good thing is its a duplex so its double storied.
Just as an additional tip, don't go for those masterton type companies, they are really inflexible. Sort of like buying a standard shoe to fit your unique foot rather than having someone design the perfect shoe for your foot.