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!
Hundo on 28/11/2018 - 13:44
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hey! I've got a wife, looking to start a family in the near future
Will you go back to work once you have children?
just my regular 3 day a week simple job for now! nothing will change, but of course i'll take my parental leave (whatever that may be) and my wife will take 6 to 12 months off. It also helps that both our parents live in the next suburb, conveniently (and also inconveniently)
@Hundo: Was our progressive tax system, which punishes you for earning more, a factor in your semi-retirement?
@Scrooge McDuck: Good question, it wasn't actually but getting hit at the top tax bracket was brutal. It was more from the stress, but definitely a win now that I think about this more haha
@Scrooge McDuck: We closed a sole trader business this year due to the tax system and our combined earnings
@KevinFine: I employ my cat as Master Lap Warming Technician to spread the income. She earns as much as me without a degree!
how much wealth do you have
At the moment 1.6 million net value with incoming cash flow from properties enough to sustain my life style which is just comfortable. I don't drive a porsche or anything fancy like 1st class flights
Will that be sustainable once you start a family?
Yeah it will be, but only 1 child - anymore would stretch the budget a bit. So fingers crossed it aint twins!
@orangetrain: A two pronged approach:
- Back to work, and
- Who wants a baby??? I might leave it on the door step of bill gates or oprah
Good news is there arent any twins in her family, except for 1 cousin.. hmmmmmmmm……….
@DarkSideSumthin: one died at a really young age apparently, they arent that close so not too sure what happened there.
@Hundo: Don’t be so sure. Only non identical twins are genetic. Identical twins are just random occurrences. I found out the hard way…
@ribenaboy: wow! my wife was telling me that the older a woman is the more likely she'll have twins, guess thats true! thanks for sharing
How much do you plan to die with, assuming 2018 dollars?
Not much actually, it sounds crazy - but I want my kid to learn the importance of money and not having money handed to him. I'm actually a big fan of travelling. So whilst I was working and buying houses, I made sure I saved up my annual leave for a massive trip every year or once every 2 years. My bucket list was to hit all 7 continents which I have done - Australia, Asia, Africa, North America, South America, Europe, and Antarctica. So the crazy part is I'm thinking of spending a good chunk of money when they allow space travelling regular people. I've been following Richard Branson's commercial spaceship trialling, he will sell tickets to people for about $250k to head outside the atmosphere an achieve 0 gravity.
So won't be something in the near future, but for sure in the next decade or so its on my list!
@Hundo: (Not much actually, it sounds crazy - but I want my kid to learn the importance of money and not having money handed to him.)
Hope youve got money for their uni education.
The family home is a large asset, arguably the most important one.
@TsunamiInTheHouse: Yep i've had a chat with the wife about this, I think i'll buy the kid a 2nd hand car and perhaps assist with a house deposit (or guarantor). I just don't want the kid to be walking around in designer clothes and the new phone
@TsunamiInTheHouse: If they qualify for HECS, why in gods name would you pay for their uni?
HECS (or whatever) only comes out once they reach a threshold.Put the money into investments, this does a number of things:
1) teach them about investing and assets
2) gives them a return
3) helps them save for a depositAsk any young person and say - do you want a deposit for a house? or paid of uni bills? and we all know the answer. If your worried about partners (as you should be) just put it in a trust.
So why not fully retired?
2 things:
I still need a bit of cash flow for now, I'm planning on selling the house i'm living in (no cgt) in the next 5-6 years when the property market circles back up again. properties go through 7 year cycles where it dips and rises. When that happens I can retire fully
transitioning to busting my butt working in corporate to not working at all would definitely mess up my mind. It was fun at first but then it felt empty after half a year. It made me realise what the older retirees must feel like when they retire completely, some of them lose their minds - I can relate to that
some of them lose their minds - I can relate to that
Try to contribute to some community you're part of. While working, did you have any hobbies? Try to balance studying, working and leisure at any point in your life so that when you make a transition, you "don't lose your mind".
@ihbh: Thanks buddy!
It took me about 6 or so months of floundering around to realise that. So i've signed up to mentor disadvantaged kids at a highschool that funnily enough I went to. So i'm looking forward to that in the new year
@freakatronic: haha! maybe if you're in highschool.
I'm going to have a hard time trying to tell them to study hard because I actually didn't do very well in high school. But it all works out if you work hard anyway once you're in the real world. I met a friend the other day at jb hifi and he didnt even get a UAI (highschool mark) and now he has his own tax company in the city… so crazy!
I'm planning on selling the house i'm living in (no cgt) in the next 5-6 years when the property market circles back up again.
What are next week's Powerball numbers?
Congrats for your achievement so far. Great AMA.
Is $1.6 mil after the loans deduction? Good on ya, mate. Well done.
how much do you get with your 3 days work?
How is your net wealth so high at age 34?
A few reasons:
I managed to move up in the ranks in my career early on, I started off in a graduate program in the government (canberra) aged 22 ($62k) and eventually moved up to senior manager by 31 ($140k) at one of the big 4 banks and by 33 ($190k) I was an executive manager for an analytics company before I went crazy with stress. But I know people who have high salaries with nothing to show for it and others on smaller salaries with a lot to show for it.
I've always been a big saver, I think 75% of my pay would go into a net savers account that I couldn't touch and made do with my other cash.
I invested in properties at the age of 26 (no parental help, they are actually really bad with money)
How did you learn that early or who taught/inspired you do build that net worth?
Fantastic question!
it was doctor phil! he went onto the oprah show to give 3 rules of money, I was only like 10 or so years old. I dont remember the exact rules but it was some where along the lines of this:
- Work out how much money you need with of course some fun spending money, save the rest
- Make sure it is automatic, have an automatic transfer option for money e.g. automatic transfer of a certain amount on the same day as you get paid
- As your salary increases, that doesn't mean your expenses increases at the same rate. Wealth creation is increasing income but maintaining or decreasing expenses. So whenever my salary went up, I would keep my same expenses and increase the amount of automatic transfers to my net saver account. However I would give myself like 100 bucks extra or something a week or something to enjoy, just so I can enjoy that jump a bit.
Also another huge driver was my circle of friends, we all went to a crappy school. But in my circle of about 8 friends, one guy was always the smartest and so driven. He managed to invest in businesses and then later opened up several restaurants, that guy retired at 26. When that happened it triggered our entire group to think outside the box.
If your plan is to keep working, work out the maths and realise the plan is to retire at 65 or whatever and hope you have enough to live on. The aim was to have a side hustle (outside of normal day job, a project or whatever), grow that and have that substitute your salary.
Anyways i'm rambling here. but essentially after witnessing our highschool buddy retire at 26, all of us started working out ways to retire early, I had some friends start up shirt businesses, whilst others tried market shops, I chose property because I had some work friends at the time who sub divided houses. So I have yet to say this to my friend properly, but he inspired me to think about retiring early and not work like a dog till i'm 65.
Clause - if you love what you do, then that wouldnt apply e.g. my wife the graphic designer.
@Hundo: The circle of friends is a big factor. They are one of the big motivators in life. And if you're Asian, you always got to be better than them. :p
@Hundo: You should contact your friend and tell them asap, i am sure they will appreciate that they inspired you to change your life for the better.
Which department did you start with? I'm the same age as you and started as a grad with 45k back in 2007…
oh hey! sorry these notifications aren't coming through to me properly, didnt even see this till now.
I started off in department of human services. It was about 47k base and i think 55k package, i just remember being excited at that age about 55k package.
Good on you!
I have clients who are on $250k and don't have much to show for it.
Net wealth of $1.6m including family home?
yes correct
oh i also know people too who just throw money at silly things who have a tonne of money. mainly doof doof cars, i'll prolly get hated by car enthusiasts but i dont get the point of doing up your honda civic or whatever base car to a point that the money invested could literally buy you a ferrari or something. Well of course if it were me i would invest it into a place.
62k as a graduate 12 years ago?? Christ they are still paying the same (or less) right now
Not in the Federal Government grad programs. They pay ok. Probably closer to 70-75k now.
55k package yep i guess about 12 years ago
Getting 62k as a graduate at the peak of financial crisis when many people were getting laid off was awesome for OP. Good on him that he didn't manage to (profanity) it up.
I invested in properties at the age of 26
Mate it sounds like you just rode the property boom, and/or lived in your parents house for far too long.
Because I just did some calculations, and if you invested 30% of your pay at 5%, paid 30% tax and received a 10% pay rise in years you haven't mentioned, you would only have $450k.
Hey mate I indeed rode the boom! Wasn't successful in the first year or so as the market stood still
Do the salary figures include Super or base salary?
yes they include super
Where were your property investments (city, suburbs if you can)?
by buying properties in sydney last 10-15 years
what bargains most appeal to you in your circumstances?
hmm good question! I'm not usually a big splurger, but when I do need something I'll go hunt for it first on Ozbargain e.g. recently it was micro SD cards because the wife dropped her phone into water!
micro SD cards are waterproof tho
Oh I don't know what happened! I'm not the most tech savvy lol
Might not be short-circuit proof if it was in the phone…
@HighAndDry: yep that was it! phone is still fine (samsung s8). All good, there were some good bargains here of course to be had!
Does your wife Work and if so does she work FT?
What do you do with your 4 days off a week?Yes my wife works as a graphic designer for a fashion label, I told her if she wanted to semi retire/retire too that I've got a plan for that. But unlike me and ALOT of my friends in corporate who hate their jobs - she loves her job. So kudos to her. Everyone around me by the age of 30 hated their corporate jobs… it was some weird kind of mid life crisis.
The other 4 days a week for the last year went like this:
- earlier on: did absolutely nothing, watched netflix and play games or pokemon go lol
- mid year: decided ok time to do something productive, developed some planning (i love planning) and did the following activities: meditate, swim, gym, fixing house things, work on optimising existing wealth e.g. finding better insurance or utility bills, and looking into building granny flats for existing houses.
- later in the year (recently): felt really empty, like some void…. so I signed up to mentor disadvantaged kids and funnily enough at the same crappy high school I went to.In summary I'm still about how to manage having this much time off (essentially a long 4 day weekend every weekend), but what I have learnt about myself is I feel really good about myself when I get off my butt and do a bunch of activities rather than watch netflix and play games all day. Also of course contributing back to society with volunteering I feel extremely happy I've taken that step and feel like I'm doing something with my life.
Forgot to mention - I'm trying to balance my days off on focusing on these categories to feel self fulfilled "Health (includes relationships), Wealth, Hobbies"
I'm also a bit of a lost soul, like most people i speak with they have this inner child voice that says "I've always wanted to be a fire fighter, or singer, or something", I'm 35 and I still don't feel particularly passionate about doing one thing - still discovering!
I think the thread is slightly misleading then. I kinda got the impression you 'retiring' meant you would be just relying on investment income as most retirees do. But really you're just going to live off your wife's income topped up by your investments which is a bit different.
Oh well. Well played either way.
Thats why its "semi retirement" and not full retirement (she can semi retire also). Also its just for the next few years before we can both fully retire. Although my wife would never retire, she's one of those "if i win the lotto I'll still be at work". Not me though!
That's not quite fair, because I don't see it as misleading at all - $1.6mil networth + income enough for his own part of their joint lifestyle isn't really "depending on his wife with his investments as top-up". That's a lot more than some people will ever have in their super by the time they're forced to retire.
@HighAndDry: I guess I just made my own assumptions when he said retired. I kinda assumed that didn’t mean his wife working full time still.
@Skramit: yeah all good, some people don't hear the "semi" part even in person. Plus my income isnt reliant on my wife at all, if she went semi retired it would be only to fund her spending money on non essential things e.g. make up or caligraphy brushes lol
Reminds me of the guy money mustache or something (not sure if its him).
His wife runs an online biz (since 2015) and that certainly adds to the household income.
Him leaving that out was imo certainly not showing the full picture, as she could of been selling $20k worth of stuff per yr, keeping $15k profit, which is $300 per week, and almost enough to live on in the us, assuming no mortgage - US houses are very cheap ($180k to $350k)).But kudos to op.
With your $1.6m net worth - does that include your ppor? (it does say ama…)
"I'm 35 and I still don't feel particularly passionate about doing one thing - still discovering!"
Don't sweat it. I'm over 50 and feel the same way. The difference is that I've come to realise that 'having' to be 'something' is just another distraction that society forces on us. Use your free time to figure out who are (sounds like what you are doing anyway), not what you 'should' do, that will flow automatically from the former.
Thanks! that is very sage advice.
I'm trying to do that indeed by trying different things out. What I have learnt about myself is to really start my productive day, I'm the kind of person that needs to complete 1 small task to feel rewarded and build momentum. I've learn that if I try and tackle a big task first I'll end up watching netflix all day or napping
@Hundo: Hah, know what you mean…. If the markets are slow I'll do some housework or some outside work…otherwise Witcher 3…..and then hate myself at the end of the day. :)
Thanks for taking time to respond in such detail, glad to hear your wife loves Work as I was fearin some tension!
Yes a lot of people ask us this whenever we're at social gatherings, to which she replies she loves her job. I just have to keep reminding people that she can also semi retire too but she just loves her craft.
I'm 35 and I still don't feel particularly passionate about doing one thing - still discovering!
When you were a child, who did you want to be when you grew up?
What are your personal talents and challenges?
What abilities do you revere in others?
As a child I wanted to be a veterinarian but realised I didn't like the poop that came with the job, then I wanted to be an important businessman that carried around brief case lol oh so very naive I was.
Talents… talents… nothing that comes to mind, but right now I do enjoy swimming 1km. Particularly with this warmer weather
I admire people who are passionate about their jobs. No matter how small or grand your role it's great seeing people knowing what they want e.g. a friend of mine left his high paying corporate job to be a teacher and he's loving life
@Hundo: Not a lot to work with here, but how would you feel about being a dolphin trainer or marine biologist?
Changing tack, in what way(s) would you like to improve humanity?
@Scrooge McDuck: Haha all good. I didn't think I would find my passionate in thus thread. But I am appreciating the very out of the box thinking!
Being based in sydney and not wanting to move I don't think a dolphin trainer would work haha. I prefer orcas but my life expectancy would probably drop in comparison lol
To improve humanity… well in sydney or Australia… would be great to reduce the unemployment rate. My first act as prime minister lol I'm going to have to think about this one carefully
@Hundo: Swim teacher. I know people that do it and find it very rewarding. They don't make a lot of cash, but after some time in the business you can generally move to management of the swim teaching business (or start your own) to reduce the hours in the water (if that starts getting to you).
@serpserpserp: Fun fact I only learnt to swim at age 26. I took some adult swim lessons. I can swim now decently but I still can't tread water, that wasn't taught in the swim classes. I still need to get around to learning how to do that, I use too much energy
This isn't a loaded question (just honestly curious): What kinds of assets did you start off with (if any) and did you receive any assistance on the way? Because otherwise, damn that's great work getting to where you are.
Thanks bud!
no assistance, my parents come from humble beginnings and are actually really terrible with money. At the age of 26 when I started buying property, I had saved up to 70k. Enough to buy my first house at 450k in the south west, I made sure it had a large enough land size to sub divide in the future to build a duplex (which happened 5-6 years later)
My amateur calculations place you as entering the property market in 2010. THAT explains a lot - but still, props to you for being in a position to make the most of the up-market, and being smart with your investments that you've kept your gains from it despite the market fluctuating. Congrats.
Property basically doubled.
What size was the land for that amount did you pull?
550m2 with 17 metre frontage. Enough for the duplex! which 5 or so years later became 2 x 4 bedroom houses, 3 bathrooms, single garage
@Godric: If you're interested in duplexes, the rules have changed recently to 12 metre frontages from 15 metres so its more easier. Makes sense as Sydney is in need of more housing options. Check with your council also what the minimum requirements are land size e.g. some are 450m and others are 500m2
@Hundo: 2x4 bedroom houses on a 550m^2 block? Jesus, people are suckers. Why even bother having a standalone dwelling if it takes up the entire block?
Do you have a family or living the single life?