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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a decent amount of debt but still a considerable low LVR which. house prices declining won't really impact my situations too much as I've accounted for bad scenarios before taking this leap. I can wait it out for the next property cycle to uplift again, so its probably a good thing if its dips/crashes for now and then moves into the recovery and growth phase again. sooner the better!
That's cool, but you have got to be careful with leverage as house prices might take a while to recover from the current downturn which I reckon still has quite a bit of time to run and will drop much more than previously. All the ducks seem to be lining up for quite a big fall at the moment which may last quite a few years as prices in Sydney and Melbourne are just plain dumb. Too much debt will be problematic in that environment. All the best!
Ideally, my point is that you can only retire if your properties are all paid in full, and you have a amount of cash savings.
Even if you have a steady net flow, any major change in the market can put you back with a bucket & mop in no time.
Agree - hence why I'll be selling in the next cycle up
You seem like you're quite passionate about this, may I ask about your situation?
my situation is classified =)
I just pick up on these OZB posts where people have something like:
"I'm a millionaire by 20, AMA" or "I have 700K savings, what shall I do"
Normally I ask some heavy questions that gets them annoyed…fair enough! sounds like you're doing well :) good stuff!
Hey OP, really inspiring post.
Im currently 16 at school and just got my first part-time job as I look to becoming more independent from my parents. Looking at the costs of uni courses, cars and insurance etc has got me nervous of how I will ever be able to afford all this.How would you suggest earning enough to be financially stable? Should I be investing in small shares at a young age to build wealth or should I study hard at uni for some course (no idea what I want to be when I'm an adult) but cop the hefty uni fees before starting to actually get out of student debt etc.
Thanks a lot!
Thanks buddy
the fact that you're already thinking about these things is amazing and very mature already. When I was 16 i didnt know what i wanted to do and i wasnt actually doing very well in school.
if you're not sure about what to do like i was, all you can do for now is study hard and get good marks. The way i saw it was the higher your marks the more options you'll have, and the worse your marks were the less options you had. Which of course didnt matter all that much post uni, as school drop outs I know with strong drive are doing very well now even compared to the dux of our school. Uni fees etc are scary but the good news is you don't have to pay it off straight away unless you have a good amount saved so you get the 25% discount, but then again you could probably put that money for better use to grow your wealth. Just view uni costs as an investment into yourself and that is a good thing.
at a young age of 16 i would suggest putting in a huge chunk into a netsaver and not touching it, whilst leaving enough for your current living expenses. the challenging part is when you first start earning money it'll feel like you're a kid in a candy store and it'll be tempting to start purchasing random items like video games or new shoes/clothes. Try to minimise, like give yourself a little treat more than when you were jobless but don't go overboard!
I don't and still don't know much about shares so i would suggest you talk to an adult who does, also i wouldnt be putting in a great deal amount there, start very small, research and learn.
Hope some of this rambling helps! you're already mentally ahead than most of the world!
Thanks for that,
I always try to be concious of how I spend my money while still having fun and enjoy the aspects of budgeting etc.Currently have all of my money, bar a couple hundred for life, put in an ING account and work money going into a Commbank one. (Better interest on non-transactional ING than Commbank, parents set up it for me ages ago) so I'll start looking at possible small investments to get my toes wet.
Cheers!
Im currently 16 at school….How would you suggest earning enough to be financially stable? Should I be investing in small shares at a young age to build wealth
WTF? why don't you just enjoy your childhood instead of chasing stupid dreams like being rich by 20?
You can never buy the age of 16 or 17 back, go ride a bike with friends, go camping, study at school well.Hey, I do still do all these things but I also want to have the money to support other aspects of life and not be stressed. For example, getting on my L's I really enjoy driving and car related stuff so to support that hobby I need to earn good money.
I also don't want to have to be crushed by debt and stress later on in my life. This wont make earning enough for houses or family expenses a chore and I can enjoy life.
I realise what you are saying but I am not obsessing over a dream of becoming über-rich ASAP but rather putting a little bit of thought into being financially stable while being able to do what I want to do and not tied down because of money struggles.
your attitude is the difference between those that have and have not. Keep up your mindset and you will do very well. The world is your oyster and you are your best/worst enemy. Keep working towards a plan and SAVE as much as you can whilst at home (even if you feel that your friends are spending and having an amazing time)…at 30 you will relax n they will have to work super hard to catch up.
lol your views are retarded. The kid has excellent foresight and you're discouraging it with "go ride a bike". Pretty sure studying well is a basic pre-requisite at any real chance of financial freedom.
16 yo dude don't listen to him - invest savings asap, time in the market etc. Avoid small shares. Put it all in VAS or MLT or AFI etc - something boring and safe.
I love when idiots start off a heated statement with 'lol'
perhaps it's a lame way at assuming victory on a subjective point.The point in matter is that this 16 year old is already plagued with financial woes/stress and he hasn't even possibly reach puberty.
Looking at the costs of uni courses, cars and insurance etc has got me nervous of how I will ever be able to afford all this.
So my answer to this is go and enjoy life as a kid, don't worry about financial woes now, this doesn't mean I asked the OP to be a bum and ride a combi van around Australia with some tanned women.
When I was 16 I rode skateboards with friends after school, we played cops & robbers with nerf guns, went for bush walks, camping.
At night they came over and we played Street Fighter 2 tournaments
When you were earning 190K in the senior manager role, what sort of stress were you under and how many hours a week did you have to work?
senior manager wasn't too bad - maybe an additional 10 to 15 hours above a 40 hour week so it was manageable. I spent a lot of time managing project stakeholders and my team at the time.
at EM level it was more chaotic dealing with very senior stakeholders, spending most of my day in meetings and never being at my desk. That would lead to me bringing work home to actually do my day job working until 10pm-midnight on most nights and a few hours on the weekend. The worst point was working till midnight every night for a month (breaking point!)
what? 10pm till midnight on most days? then some hours on weekends? Holy crap!
wouldn't that equal to 80-90hour weeks?
By working that amount of hours, did you health deteriorate? E.g weight gain? Lack of fitness etc
sounds about right, definitely not great for mental health. but it wasn't until i reached that level that i finally understood all these other EM's walking around and always checking emails on their phones, holding their laptops, never being at their desks, and sending out emails at all hours of the night. Not my cup of tea but i see alot of people who do this. Not sure if they are happy and driven to do so or just in it for the $$$
@jaseredpanda: Was it just your workplace? Or is that the standard experience of em?
Were the meetings actually useful (or mostly just a waste of time)?
@Other: they were useful, its just standard in that role especially when you get paid the big bucks.
definitely not the workplace, and i can imagine it being standard experience for most EM's (not all if you're lucky enough to be in a simple non project based area like operations)
@jaseredpanda: Hmm I think you'll find the Ops areas still have that stress of constant meetings of stakeholders far and wide and the constant need to validate your cost centre existence.
Plus everything is fine until your area screws up, then you are the one in serious trouble.
All EM's are in it for the money, or it simply becomes their life. Very few are truly so ambitious that they are gunning to become the next CEO, although they all will say they could do that job in a heartbeat.
Well done OP, if you got the time should get into golf. Addictive,fun and you can keep playing till you kick the bucket.
I've always wondered about golf, i'm not good at it and when my friends and i go to the driving range I always just try and happy gilmore it lol
putt putt is fun. But I can't envisage myself truly enjoying it, although I can appreciate people who do enjoy itI'm surprised as an EM at a bank it wasn't compulsory to play golf!
What is your cash flow like?
How much are you pulling in net each month after all essential expenses (maintenance, management fees, tax etc.) inluding your 3 days work.
How much do you have to live off each month with your current situation?
I actually don't know off the top of my head, as i number crunched this a while back and i like to set and forget these things. I do look at my different bank accounts from time to time and be like ok good its still going up. So to live off after all expenses I have about 500 each week to use to eat out or do whatever but we hardly come close to doing that (i just aggressively throw money into my offset and all my rental income goes in there too)
How much pay cut did you take going from your EM role to your current role?
Did you find it hard not having the extra $$$$?
ALOT lol
with a drop on level and also losing 2 days, its a cost cut of over 100k.
it wasnt as hard but it made me stop splurging on a whim from time to time e.g. ooo theres a 1k set of lego i can buy and just buy it.
I can still do that but just not as often! just live humbly which i've mainly been doing anyway
wat the…so you still make 90K in your current role and only working 3 days?
Are you guys recruiting???
nope nope not 90k! I wish, closer to 70k
@jaseredpanda: Well, now that semi retired statement does seem a little misleading.
You still earn above the median wage. Your 3 day a week wage is still higher than more than 50% of the whole full time working population.
Nicely done though. I've enjoyed reading this AMA. I hope to do something similar down the track.
@endolphin: true but the extra cash still goes into the offset, i could work 2 days but 3 seemed like a good amount in the work place
all the best buddy! hope your side hustle becomes your main hustle!
@jaseredpanda: I work full time in recruitment and just beat that…clearly I am doing something wrong
You are an inspiration! I am 28 and going through a mid life crisis, started to dislike my job.
its weird how people have mid life crisis around that age. one time my highschool mates sat around together several years ago and the ones in corporate were really sad, ultimately it was asked are you happy doing what you do now and it was a resounding no for many people.
like i tell most people who say they wish they had this "if you dont have a side hustle, what you're doing now is your life plan"
otherwise of course if you have a passion for a type of work then by all means do that, my friend quit his high paying corporate job to become a teacher. took up courses and is so happy now, its been maybe 4 years now and he thinks he is in line to become a head teacher of a department!
Do you max out your super contribution to 25k per year?
nope! i'm really bad with super (a big weakness) its like a vortex that I have no idea what happens to it. Pretty much whenever i change jobs i move my old super into the new work place super
good news is i havent accounted for any money in there as part of my retirement, so hopefully i'll have a good surprised in the future (or not)
As someone who works in Super, my advice is to just put the minimum required. Super is a load of shit.
Do you plan on being around after age 67? if so, super is one of the great (legal) tax dodges available to payg workers - anyone on around 70k pa+ gross should maximise the concessional cap each year. The other two great Australian tax dodges being PPOR CGT exemption, and negative gearing (currently under attack by leftist identity politics).
Can you elaborate? Guy below you says it's great.
I'd also like you to elaborate a bit please.
true that.
What are your top 5 Joe Rogen podcasts?
oh nice!
fantastic question! i'm still fairly new to joe rogan so i've listen to maybe 50 or so podcasts. but my favourites are
- GSP (i'm a fan of his)
- elon musk (hard to get through his weirdness but he is just on another level of smartness)
- joey diaz because he is just so old school and has the best stories
- steven pressfield (still need to read his book, but he pretty much shaped joe rogan's motivation a lot too) a great motivational thinker this guy
- TJ dillashaw (similiar to GSP but i love these guys who are so smart and scientific with who they surround themselves with, also their level of commitment is so next level)
i cant remember alot of the others and there are so many i still haven't listened to. Let me know what yours are, keen to hear!
p.s. i had to switch off maculay culkin, it was so terrible and cringey
What are you like in the looks department? Would females be dating you for amazing personality and looks or for your bank balance?
I think i'm a bit above average, even before i made my cash i've dated quite a bit mainly because i'm generally an assertive guy and usually in the centre of a party circle talking about stuff. Not in every situation of course, but thats my general nature. The only woman who has been with me since my bigger bank balance is my current wife who was there when i had nothing anyway
my current wife
Freudian slip? 😜
When you rent out your investment properties, in the instances where your renting room by room:
1) Do you rent the room furnished? Are there shared amenities like a washing machine or do you leave it to the renter to provide?
2) Do you charge all inclusive per week, or do you charge them separately for utilities like gas, electricity, internet, water etc.That was very early on with my first place that i did that room by room whilst i lived there too
1. i did rent in furnished, i had some spare beds that my parents hoarded even though I moved out. Also old study tables and chairs etc and a simple cheap wardrobe or open coat hanger type thing. The shared stuff I paid on my own e.g. washing machine etc
2. i recall doing it separately since i was a noob and had no idea how much electricity it would consume. except for fixed costs like internet
Today I learned that going part-time is semi-retiring.
it sure is - if you receive automatic income to substitute the days you aren't working. retirement is when this automatic income substitutes your entire salary or enough to cover what you need.
Fair enough, forgot that it's not an employment but your assets.
I suppose congratulations are in order. Enjoy, dude.
So is your 1.6m net worth between you and your partner or just you?
Also do you own your PPOR?
Just a headsup. Childcare is SUPER expensive. Its like private school for five years.
the both of us and i almost do fully own my PPOR
yep so i've been told about childcare, the good news I'll be able to help 40% of that time. it also helps that both my parents and her parents live in a nearby suburb and they want us to have kids so they can help out. whether they do or don't thats fine, plus both my wife and i have working from home options so really its just 1 to 2 days at worst for childcare potentially.
If you are only working 3 days and can care for your kid 2 days you'll be fine.
Working from home does not mean you don't put your kid in childcare. The kid is in childcare and you are working or you are looking after the child. The working at home whilst a kid under 5 is home is a myth!
Good point! i might have to make use of retired parents (they are super keen anyway).
How many kids do you have serp?
@jaseredpanda: Just the two. Very young ones too. Make sure you get your gaming in on your big screen before you have them because that won't be happening once they are born! Enjoy that!
@serpserpserp: I saw a trick where you give your kid a disconnected controller and you use the real controller and you both have a great time playing LOL
Plus one this unless you want your children watching tv 8 hours per day
It seem like you achieved great goals, it's something that I would want to do. I'm currently 24 years old and have an asset of around 30k. What ideas you think I should put this into? Save up? Invest?
well a lot of people do different things with different amounts depending on how savvy and risk averse they are.
for now with no other assets i would put in into a high interest term savings account for maybe half a year to a year before you decide what to do.
you might be into shares or other things, which i'm clueless about myself. my only suggestion is to smart small and not chuck everything in.
the housing market is a bit tough now and its at the phase of declining over the next 3 years, so might be worth while to look into that. your parents could be guarantors if need be.
end of the day - if you're saving money, you're already winning!
I was a high risk taker before, lost quite a lot especially when my gambling problem gotten involved. Got out of that stage and wouldn't dare to go near the pokies now. Now I'm more conservative with my assets in case I fall down the same path again.
Which high term saving account would that be? I haven't search around yet but I would ask you first if you know which bank has the highest in term of interest.
I wouldn't want my parents to be my guarantors if I were plan to invest into the housing market. I'm trying to do everything myself without my parents help, so far so good for myself.
I wouldn't try putting into shares for the time being, I gave it ago awhile back and lost all my profit margin due to lack of studies and time. But I would give it another go in due future once I am more certain in know what I'm doing with a bigger asset.
Wow thanks for sharing, what a journey - glad you're in a better place now.
I'm not sure actually on highest interest but i believe there are some good websites that compare stuff, i think maybe even iselect has that function now.
My thought process is if you have a chunk of money sitting there doing nothing, you're better off with it earning interest whilst you decide what to do with it. Its great that you are thinking of independence as I know some people who don't have a plan to leave the nest despite being in their 30s. Plus i know people in debt with no assets so you're doing pretty well
You might not have the answers now but your mind set is good!
hi, if you're after online saving account, then you may want to check out UBank, ME Bank, or ING Direct.
My choice is UBank 2.87% because it has simple condition which only requires you to deposit min $200 per month.
Whilst, ME Bank at 2.85% doesn't require you to deposit any money - but it requires you to do "Tap n Go" purchase once a week. If you miss this, you will not get 2.85%.
ING Direct at 2.80% requires you to deposit min $1,000 and spend/purchase at least 5 times a month.Or you can check out the term deposit which may offer higher interest rates.
hope it helps.
It seem like you achieved great goals, it's something that I would want to do.
The OP rode a once in a generation housing boom, over which property prices literally doubled.
You should invest your money wisely, you'll never be able to achieve this kind of financial success unless you start a successful start-up or something.
Thats the reason I keep hearing as well. 'Once in a generation housing boom'!
The property cycle is what the name suggests, cyclical. It will repeat in 7-10 years.
You may not have the same boom the next cycle, but you will see an increase nonetheless.All the people I know saying that are the ones who had a chance but did not invest citing reasons like too expensive now, will buy later.
What's your ethnicity?
I was born in wollongong, but my background is cantonese (HK) with parents raised in vietnam.
Once in a blue moon people i meet kind of incline that i'm some cashed up chinese investor from a wealthy family buying everything here.
Which is the total opposite, my parents are labourers on minimum wage - who are bad with money and weren't too happy with my initial house purchases lol
now they won't say it but i think they are proud
How does your parents and in-laws feel about you been semi retired?
LOL fantastic question
both sides don't know! mainly worried about her parents side as they have the mentality of always working super hard no matter what. its a cultural thing so this concept of not working would not sit too well with them.
My parents on the other hand arent too bad so they would be like ok cool, however my dad does see them a fair bit at the shops and would always tell them random stuff about me. So by default they don't know either.
@jackofspade: That's my plan if I ever bump into them on the streets when I go get a hair cut or something. Hasn't happened yet but I have seen them from a distance but they didn't see me.
Well done! The Asian mentality is often to go into medicine, dentistry, law, etc. to build financial success. The reality (in medicine) is that what you have achieved is close to impossible. At age 34, I was less than a year out from finishing training & starting to build a practice, with close to zero income & with ongoing expenses. The previous 3 years had cost me about $120k in training & examination fees, on a gross income of about $250k total.
wow you're definitely a high achiever! i have a lot of respect for doctors, like your job is literally to help people and save lives.
my doctor and i had this long chat since he moved from having his own practice to now working in a medical centre. he told me that he needed more work life balance so he can take annual leave without worry, and also he has access to pathology labs there and its just a larger scale. Interesting as I've never thought about why some doctors have their own practice whilst others are in medical centres
Op,
Why did you age so fast?
haha please elaborate! happy to answer!
Isn't early retirement over rated?
Yes it can be. I think it depends on what you do with your time which essentially is the most precious thing in the world.
You ever sit at your computer or look at your phone and feel bored with what to do next on it. It's kind of like that, having the internet and being able to watch or do pretty much anything you want but you still feel bored or lost is like retirement.
It's up to you what you do and I realised I enjoy my time off when I'm busy working or learning about myself e.g. swimming or recently giving back to the community
I did a paid leave for 3 months..So wanted to get back to work within a month or so..don't get me wrong, I'm all for financial independence but not a big fan of an early retirement..Job well done in your case
Fair enough. Definitely each to their own as I know some people are itching to work.
I just find most people are in there 2 categories
- Love their job but pays little
- Hates their job but pays the bills or a lot
But if you love your job and it pays the bills then that's quite rare and very amazing.
My mindset is I would rather be healthy and retired early than be 65 and now be potentially too old to do anything. Although of course there are some older folks out there way healthier than most of us right now lol
I find that weekday events are mostly full of old folks.
Lots of spare time to waste. Which is good but it can go downhill if you take up bad habits/addictions.
Totally agree which doesn't surprise now when I think about old people playing pokies. Which I generally dislike casinos anyway. Bad habits easy to come by when you have too much time.
Are you enrolled to a financial / investment education company? How much it cost? Whats the biggest financial mistake you had?
No education company or program. I just listened to what my older work mates did with subdividing and they were predicting the boom.
Biggest financial mistake, I think right now was not looking carefully at the architect plans and having it submitted council. One of the patios has an open roof, so i'll need to sort that out now. It also wouldn't have been an extra or big of a cost for the builder but now I've gotta sort that out myself. Don't know what it'll cost but hopefully not too crazy. I'm pretty risk at averse so I don't even really gamble during Melbourne cup. Maybe one of those office lucky draw things on the day but that's about it
36yrs old, lost my $70K job in Jan this year. Managed to make $20k working for myself this year. Just spent a month working full time work experience to land a $24 per hour 3 month contract. Renting, own no assets and have zero skills that can get me a job above $50k p.a Working hard doesn't get you anywhere in my experience. Working smarter seems to be the better way. Just not that smart
Some up 2018… >>I'm Exhausted<<
Remember some of us are doing it tough whilst you boast about how "successful" you are
Congratulations btw for being semi-retired ;)
That's tough dude. Thanks for sharing, I definitely do not take this for granted. In fact I'm trying to meditate a few minutes a day each morning and focus on being grateful for what I have before I start my day.
I'm also trying to stay grounded too by helping others, I signed up recently to mentor disadvantaged kids from the same high school I went to. I'm really looking forward to starting that next year.
All the best mate, hope things work out or are working out
I did the same thing at 34, but not on purpose. I just didn't try hard to look for a new job after leaving my old job. Started renting out a room in my apartment for extra income. Haven't had a full time job since, just random casual jobs.
Didn't do anything smart with property like you. Only brought off the plan mass manufactured apartments. But I have no debt now.
Similar background, born in HK worked a little in finance but mainly in IT.
Nice one!
I've always stayed away from apartments due to strata and the capital growth. But of course they can be very profitable too. Is the strata ok?
One of the stratas has been going badly, law suit with original builders due to water leakage. Millions in repair bills taking years(a bit like the light rail in Sydney) but there're hundreds of other owners to share the load.
Another one had strata bills that were increasing at about twice or more the rate of inflation until someone started suing, but they haven't increased for several years now.
Other than that it's ok. I never ask the strata for anything. But if you want to do any upgrades/replacements, they usually have rules about the color and look of things, they want everyone's place to look the same.
Glad it's going somewhat ok.
A friend of mine who lives in homebush, someone pulled a prank by smashing the fire hydrant top floor and the entire apartment block was not liveable for 6 months. Insane what can happen, I haven't asked what the strata costs would be but luckily for him he was just renting there
How much of this 1.6 million wealth "actual wealth" and not just some paper value assessment of property?
Or maybe more relevant in an income stream aspect rather than wealth, is it reasonably stable for example positively geared properties, and even the property prices don't go anywhere you'll still have a comfortable semi-retirement income wise?I know a few people on the whole property bandwagon, all essentially hoping to make their investment worthwhile via a big capital gain rather than long-term rental or something. I always had considered steady income from an investment like rental to be the only "sustainable" way to live off an investment, rather than typical buy-low-sell-high of shares, property, bitcoin, etc.
Ofcourse goes to show I'm your average joe not anywhere near retirement yet lol. So well done.Hey buddy
Hard to answer your question but paper value from banks is how net value is assessed as they are tight with lending as opposed to say asking a real estate agent who always over prices what you have. Banks use third party valuation companies who come by to inspect houses etc. I can tell you I don't have 1.6 million sitting in cash right now.
From what you have said it's correct on both capital and rental income. Steady income from a good rental cash flow is the way.
If you have a portfolio, selling a house will reduce your loans and will therefore increase your rental cash flow. Less money owing and more money kept from rent.
Great thread :)
Do you have any ‘vices’ you consider a financial drain but you can’t help indulging in? E.g. a german car, watches, good coffee, eating out, hobbies that cost money etc ( those are mine basically). I’m 31 now but the lifestyle creep over the years has certainly had an impact. What is your secret to coping with it or are you just frugal by nature?
Edit: some background; first home 40% paid off and still being rented out, boarding with one parent. Income ~100k.
So do you still have a lot of debt and when do you envisage paying that down? Will a decline in house prices impact your situation?