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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Thanks for your well thought out response. I'm doing alright but I've somewhat hit a glass ceiling of sorts, like you I feel the next pay increase would bring about unwanted stress. I'm learning to be more contented with the little things in life. I'm based in WA, so living costs are lower and you can get by fairly comfortably without making as much as the folk in Sydney. I do see some similarities with your 3 prong approach, I do transfer 100% of my salary to my offset account and only ever have $20 in my transactional account should I need to withdraw cash. Also meals with family are usually celebratory. I do spend more socialising as I'm still single haha. Congratulations again on retiring and enjoying what life truly has to offer without having copious amounts of money :)
Thanks for sharing! Each situation is different and it might be worth putting yourself through that stress if the money you know could be used to grow into something that will help you later on. Otherwise if doesn't and won't make much of a difference then its not worth the kick in the mental health department
I'm not too familiar with WA, but i do recall going to Perth for a project and I bought a small coffee that cost like 5-6 bucks!
i was like wtf! but that was probably around the mining boom back then
@Hundo: We've came a long way since then. As a coffee fanatic, I'd say some of our local roasters are outdoing their eastern counterparts both on quality and price. If you know the lay of the land, it's easy to find good coffee in the city at a very reasonable price. Also the more saturated pool of cafes over the last couple years has certainly pushed for a more competitive market.
I'd say gaming and model building are time consuming but cheaper hobbies to embark on which from a financial standpoint is great bang for buck. Great that you find joy in them, I quit gaming religiously a few years back but indulge in a couple star wars Lego sets and other Sci Fi collectables myself now and again. But cars and watches are certainly the ones giving me the most joy yet causing me the most wallet grief. I did make some side income flipping vintage watches and hope to do it as a side hustle more seriously at some point but for now it's more a drain than a gain.
Is the $1.6M net wealth your share or is it combined with your wife?
Combined
Hi Op, you're an inspiration and really want to say well done and thank you for sharing! How did you get your current role doing recruitment resourcing. Are you able to shed some information as to what you do in your current role.
Thanks buddy
Happy to share. I just had a chat with my GM since I was struggling in my EM role and we worked out that I could still be part of the company by doing a less stressful role.
My current role is sourcing so it's the very initial step to recruitment where I find good talent on LinkedIn. I reach out to them and ask if they are interested in a chat and if they are I hand them across to the recruiters. So essentially a head hunter! Or as some call me at work the professional stalker lol. I have a new found appreciation of how hard the recruitment process is. I had no prior recruitment experience before as my role was workforce planning projects which is very different to this.
Just goes to show that the recruitment/HR industry is a bit of an "art".
Do you mind if I ask what may be your KPIs for the role. I assume your firm is quite niche as well.
Reason why I ask is I've been looking to get back into HR but at present cannot fathom going into recruitment (agency) or sourcing roles. Any information will be helpful.
Recruitment is a difficult job as your peddling expectations from all parties. You're the middle person!
It really is hard
KPI's right now are based on offers made to candidates per month, as its pretty amazing if a candidate makes it through this specialised recruitment process to the end. Whether they take the role or not is out of my control. I'm finding it that 1 out of 100 people I find end up getting to that offer stage and then its about 50 50 if they say yes or no. Yes my firm is quite niche indeed
Congratulations on achieving FIRE at such a young age. I have some questions for you. I actually have a lot of questions but I'll stick with just these 4:
When you have that 1 child you mentioned having, how are you going to teach her regarding accumulation of wealth?
Private or public school (I assume you've thought about this since you seem to plan ahead).
Are you going to provide them with financial assistance (cash, expensive presents, etc) when they become an adult?
If you don't mind answering: What is your IQ test score?
Hey buddy
I haven't thought that far ahead yet but I definitely want to educate them about things that they don't but should teach in schools. Like taxes and how to purchase a house or change a tyre (off topic here). I had to learn a lot of these things myself and stumbled through them. The main thing is I want them to appreciate the value of money firstly and then to look at the big picture slowly as they reach adulthood without jeopardizing their youth. Obviously this will be harder said than done.
Definitely public. I live a humble life and I went to a public school. Great if you're really loaded to do it but I believe if a kid is driven enough they can get into selective. Also even if they don't make it into a selective school they'll be fine after if they are driven in life no matter what happens anyway. Even if my kid wanted to become an artist as long as they can stand up on their own 2 feet, I don't care if they make 40k or 300k as long as they are happy.
My wife and i only spend a max of 100 on gifts since we're not lavish people, we do enjoy big holidays but that's about it. So for our future kid the biggest items they'll get is a 2nd hand sensible car and i'll assist them with a house deposit (Not fund the whole thing or maybe be a guarantor) if they can't save a good amount I don't think they should enter the property market.
I've never actually taken an IQ test so I'm not sure! But I doubt I'm an Einstein lol
Awesome questions!
Thanks for the response.
Awesome questions!
Awesome answers.
You have 100% the same philosophy as I do regarding answers 2 and 3 (mostly because I've researched this topic extensively).
I want to avoid providing EOC https://en.wikipedia.org/wiki/The_Millionaire_Next_Door#Econ…Oh wow didn't realise there was an actual term "EOC" lol I'll have to refer this link when I talk to people about this. Thanks for that!
Hey OP just wanted to say congratz and thank you for being so willing to share all the very details. All the best mate
Thanks mate! Cheers for the kind words
How much debt do you have?
That's actually a good question. I'm not the OP but I do have some strategic low interest debt. The interest I pay on the loans is less than the investment returns I get on the money that was invested.
An example for my situation might be using a 0% interest on purchases credit card for a period of time. The money that I would have used to buy things is instead being redirected to something that pays an income. When the offer ends the money I would have spent on purchases but saved instead is withdrawn and the debt repaid and I'm in profit.
So…not all debt is bad just as long as it's manageable and well understood.
At the moment around the 2M Mark with great cash flow. But in the near or distant future it'll be 500k ish when I sell a house.
Hey, congrats on all your successes!
Could you elaborate on your career progression and what you believe you did that allowed you to take that next step from one role/promotion onto the next? It sounds like you really excelled in what you did, so which particular attributes do you believe allowed you to separate yourself from the crowd in terms of career?
Would you recommend hopping companies to move up or progressing internally?
Almost missed this one!
My own personal story -
- foundation - I did ok at uni (credit average) and with that applied for grad programs which was a fantastic stepping stone in the corporate world, they generally look for people with at least credit average and some relevant experience. Very gruelling process with usually 9 stages of interviews including tests and group activities. but once you get in you do rotations which could be 6 months around different areas in the company that you are suited to or are interested in. at the end of the program which could be 1 to 2 years you end up with a big pay jump and more senior role. essentially they see graduates in programs as future leaders of the company. I recall moving from government APS 3 level to APS 5-6 after my graduate year
- Side step - When I outgrew my role and my department had a downswing on hiring more people and there wasn't much movement between teams, i packed my bags and went to a big 4 management consulting firm where I got a similiar paying job but at that level I was at the bottom level of that team (meaning i could only go up by proving myself). within 6 months i got promoted from analyst level to a consultant type level. So this was done with moving somewhere where I was at the bottom with only up to go and working hard to prove myself
- Diagonal move - after 2 or more years (cant remember) i was lucky enough to move diagonally so in a slightly different field (now doing project delivery) in a more senior role and to a different company (big 4 bank). This happened as out of interest a good practice for people is to get job email alerts of roles they are keen on, so one day a role popped up and i thought i'm ready for a move and it looks great. I moved around from manager to senior manager roles in this bank mainly by proving myself on projects that had high visibility. after 7 years there i did another diagonal move to an analytics companyPro tip - get good an interviews, every time i leave an interview i write down every question they ask me and i put it in an excel matrix. I later go home and write the perfect response. my matrix looks like this if you can visualise it. the horizontal axis is every question or grouped questions if similar) and the vertical axis are each role/company i worked, i fill in my best answer from each role and i highlight the cell that i think has the best answer. I memorise this matrix well before each interview and it just keeps evolving this matrix. So whenever i'm in an interview i feel very calm and ready for anything
Have you travelled?
Haha thanks for quoting what I said.
To elaborate a bit more i made sure I travelled which did slow down a bit of my financial goals but I didn't care because I knew people who worked so hard and never got a chance to travel and before they knew it they had started a family and that stopped all plans
Well done on making it to where you are! As someone who has also been offered a grad position interstate (Sydney, I live in Melbourne) would you say that moving interstate for a grad program was good for you? How did you find moving back and getting a job? Was it easy?
Not the OP. Long time ago same position as you, best thing I ever did. Just remember that no one up there cares about the Melb/Sydney thing, that is something Melbournians tend to harbour!
Moving back to Melb you'll find a job easy. Once you are back here network like crazy because it really is a small town compare to Sydney (in a Corporate world sense). It is really hard to find those great jobs in Melbourne without being in the know.
Thanks for the reply! I'm a bit older now so part of me is kind of hesitant about moving interstate. It's a great opportunity and I'd be kicking myself not to take it.
Is it really that hard to find a good job in Melbourne if you haven't networked? What do you mean by "great jobs"?
If you aren't tied down, go to Sydney. Get a new experience, it is a great lifestyle up there. A truly metropolitan city.
You can find a good job in Melbourne. I guess my statement might be a little misleading, you can probably find great jobs anywhere, I think they'll just be easier to come by with networking. In my field (which I don't really want to disclose but lets say in the corporate world) this is def the case.
@serpserpserp: oh one other thing! what serp serp said is correct (if you are not tied down) the EX i had at the time and i tried doing long distance but that failed
It was fantastic
So this is how it played out. I was offered 2 grad programs, 1 for one of big 4 banks sydney and another in Canberra with government. The salary was slightly higher for government and they had a HR based grad rotations too whilst that bank did not. So I packed up my bags and left despite my friends saying Canberra is boring and my parents not wanting to cut the umbilical cord lol.
Best decision for me as I learnt how to be independent sharing a house with a few other grads. Our grad group became a family because 30 of us came from all across Australia and not Canberra. Canberra was fun based on the people that you're with, otherwise the place isn't that exciting.
Moving back and finding a job was easy since I'm from sydney. I came back close to 2 years later and it was really easy to adjust back.
If you had more than one offer i would advise you to focus on the career you want rather than the location as your first starting point. Your career will evolve and you can work wherever you want later, a good start is important. P.s. the big 4 banks offered me a role in wealth management because I interviewed really well but maths wasn't really a strong point for me and importantly had nothing to do with my degree
What was the initial reaction at your work when you suggested this as an option? Was it completely out of the blue, or had you mentioned in previous discussions with your manager that you were looking to reduce hours?
I was having a "career development" discussion with my manager a few weeks ago and he somewhat unexpectedly asked me where I could see myself in 10 years time. I blurted out "retired" before I could stop myself. I told him that was only a semi serious answer, but he was actually pretty respectful of that response. I imagine there would be quite a few bosses who wouldn't like to hear that from their staff, but he was good and said if I was more serious about it down the track then perhaps some middle ground could be found.
I was also going to ask about your parents reaction but I was beaten to it. I've told my parents for many years that I want to retire early and I don't think they know how to respond to that. They certainly don't understand it (which I find really odd to be honest - who wants to work until they are 60 if they can avoid it)
Really good question
Reaction from my GM was great, it helped that I'm in the wider HR department and they lead by example with work life balance.
Thanks for sharing - I have never actually had the conversation with my parents abojt retirement in general but it would be interesting to hear their thoughts. Likely similar to yours lolFrom my experience good leaders are ok if you provide honest answers even if it's about using this company as a stepping stone for the next move e.g. a colleague of mine said that and everyone knew. The only caveat is that it's not in the distant future e.g. within 2 years lol.
More than likely the boss you're speaking with knows himself that he'll move on in 10 years. I did laugh when you said you blurted that out haha and depending how old you are might be that shock factor.
I did mention this throughout 1 on 1s that it was my plan in a few years once I set up the company with workforce planning. My gm asked for 18 months of commitment in that role at the time and she would be happy with whatever I chose to do next.
However that never happened as the role was too full on. So my GM wasn't in shock that I presented that option a bit later. But for the rest of the wider teams it was! I pretty much dropped down 4 levels, but the team were very supportive and after a few months the world moved on as if nothing happened. Particularly since I had some early wins in the new role.
With this 1.6m value how much cash do you have at the moment, and remaining loan balance and how much you earn nett weekly include rental income and salary(yourself and your wife)?
Just want to know the number to get semi retired life at 34
Thanks for sharing =) great achievement
I asked this question about the investment mix and got a non specific answer. Not sure what that means..
hey guys morning
sorry i can't recall what i said in the earlier threads and apologies if not as clear, I cant recall or have specific numbers on me (in some excel sheet done over a year ago). I just usually set and forget things as my motto for saving.
But to roughly answer on my situation - Loan is about 2M for now but will drop to 500k ish when i sell a place in the future, not sure about net rental but gross income i recall is about 9-10k a month, salaries combined is about 9k a month roughly. Things I do know is i had about 250k at the start of the year in my offset and its now 300k (current cash) whilst continuing with this lifestyle. All income, everything goes into my offset, rent and salaries. We only draw out about 500 per week max to spend on things, but being non big spenders we never really use it e.g. bring our own lunch in each day, then again some weeks we'll have big social events or presents to give so it'll go up beyond 500.
The game plan for now is just to keep saving up for now and wait out the market drop and sell in a couple of years in the upswing of the 7 year cycle. Or longer, not really an issue as we're happy with our life style now and can easily wait out.
Ultimately - To answer your question on how much cash you need to semi retire or fully retire is based on what life style you'll be happy with. Some people need 1k a week to spend on clothes and drinking at clubs or music festivals, if thats the case thats fine but know you'll have to generate net income automatically from whatever sources e.g. properties/shares above that. Also note you could have 10 million dollars worth of property but be negatively geared vs someone with 1 million dollars worth of property positively geared and getting that 1k per week from rent. The goal for most property investors is to sell property at the right time to bring loans down and therefore have more cashflow from incoming rent, hence why a lot of investors have a lot of properties and just stay afloat until they sell (but can be a dangerous game - i'm not that extreme!).
Of course thats just one strategy, i'm sure shares investor peeps have their strategies which i'm not familiar with
Just saying…I'd not have all my pennies in one bucket, ie property. I certainly don't.
I am also confused.
Are your loans P/I or interest only ? At current rates say at 4.33%, with a comparison rate of 4.62% over 30 yrs A $2m P/L loan requires a repayment of $9933/mth. Interest Only @ 5.39% the repayments are $8983/mth. (bendigo bank loan calculator)
Your numbers are a little odd..
@Chubbsmcfatflabs: I'm probably getting some numbers mixed up but I do have 300k in the offset too if thats a factor. they are interest only but i throw money in there as if they are principal and interest anyway.
Yeah logically the smartest thing isnt to have all your eggs in one basket, and diversify like you probably did with property/shares/cash/business ventures etc.
I have thought about business ventures but i'm concerned that it becomes a labour of love, i see business owners that can't fully trust other people to completely manage the business because its their baby or they become money obsessed and expand expand expand.
I think i just want the simple life, but definitely admire those who go hard for their business
interesting in your situation as well as you seem very keen on property
Thanks for the answer. Well done OP. In pretty similiar situation 35old have 2 property value 1.6m, debt level 300k, 700k ish cash in bank, except i have 3 kids and single income. wife full time mom. So no early retirement yet for me…
Should start looking to Buy more positife gearing peoperty like you have..
OP, really good insights in your responses. Again, well done! Thinking about it, WE are also in a very similar position without investment properties ( No cash flow ) PPoR valued at 1.1M fully paid and we have nearly 400K saved up. The plan is to wait for the market to settle and buy investment properties. Any advise on getting started in the investment properties portfolio ?
Wow you have done really well! you must have high incomes so congrats!
I would suggest a few tips:
- know this is an investment property and mistakes early investors do is end up buying places they want to be perfect as if they were going to live in them. So it doesn't matter if its a timber shack in whoop whoop, but if it makes you money then that is gold
- start off small, by that i mean keep enough money as if you were going to buy a 2nd or potentially a 3rd property with you preapproval (if you can).
- Research research research, have a plan on what property strategy you have as there are heaps, some people flip places (renovate and sell quickly), others buy and hold (like me), others go with just apartments whilst others houses with land to construct (sometimes with others) for town houses or apartment blocks. ALso get familiar with the areas you want to buy, find out if they are close to transport/shops/unis/schools
- there is on magical answer with the crystal ball but it looks like the market will continue dipping over the next 3 to 4 years before it starts to upswing (could be longer) right now its starting to look like a buyers market.
- don't be afraid to low ball offers, i generally like sale prices over auctions because people get caught up in the moment and go over their budgets.
- to get you practicing, pretend you were going to go buy a place right now (even though you arent), like actually go to your broker and get a preapproval and see what you could get and where you wuold buy right now if you had to (but don't - unless you find a good price with some high yields)Those are some tips off the top of my head! don't know if this answers your question
OP, great tips and thanks again for sharing. I am contemplating two strategies
1. Buy a big block (800+SqM) with potential to build 4-5 townhouses close to the train lines or
2. Accumulate 2-4 properties in different areas in next few years
I personally like the option 1 but its more work and risk of having all your eggs in one basket.
Any advise here ?Since you have alot of equity, option one can work but it's more stressful and you are putting your eggs into one basket. I would go for option 2 to hedge your bets without as much stress I.e. you buy one house and rent it out see how you go, then buy another and so forth.
However there is a way for you to do option 1 without as much risk but requires a lot of trust. Most of the time when build town houses, it's done in partnerships or groups of people. So really it can work with people you trust and of course well written contracts/agreements including scenarios e.g. 5 town houses between 3 people, you get 1 each and the other 2 to be sold or kept and incoming split.
@Hundo: Hmm, have not really thought about pooling. Good way to learn the process as well and probably can go out on my own second or third time. Will give a think about it !!
Great AMA, I'm feeling really inspired by your outlook on life :D
My question is, have you taken on more of the domestic tasks now that you're at home more often? Does your wife dump it all on you given you're not as tired coming home from work? hehe
Thanks!
He could always buy the Xiaomi mob+vac robot and hide it, then only use it when the wife's out, building up domestic work credit while playing the switch ;)
ROFL! gold! how did i not think of that?!!!
I did think about buying a puppy and attaching some kind of mop device, but this seems more reasonable/sensible
We still generally split things, i handle all of the paper work with bills etc and wealth building stuff. Whilst she does more of the domestic things like the cooking (she loves to cook and bake especially)
But we do big clean ups together, i'm a great sweeper and toilet cleaner lol
Since you have stated you are from Asian background, as an Asian immigrant myself, Id like to ask if the so-called bamboo ceiling really exist in the corporate world? Do you consider you have broken it through in the past years?
interesting question, sitting here thinking about this…
I guess depending on where you work and what you do might affect this e.g. IT no issues lol, but from my experience in numerous sectors I would say there bamboo ceiling isn't really as prevalent anymore. I see a good diversity of leaders including women even at the CEO level
However in saying that, I did have a previous female EM i worked under a few years ago (best transformational leader and mentor). She opened my eyes that asian women have it tough right now getting into senior roles, she lost out to a non asian woman who was way less qualified than her to get into a GM position. Even though she was already acting in the role, delivered great results and everybody respects her. It took her several years later to finally hit GM.
I see alot of diverse males in leadership roles, some women (and more increasing) but not many female asian leaders. Just from my observations and experience
Hey OP, first off congratulations.
I’m 33 and have 90k in super in a direct investment option with Hostplus which I recently set up to give me more control.
I have approx 70k in savings (term deposit) which I’m planning to put into a property.
I live in a share house paying $800 a month rent and earn $88k plus super.
What advise would you give to someone in my position so I can consider having more flexibility in my work life
Thanks buddy
How i solve most problems is by working backwards with the result you're after.
So visualise (and work out mathematically) the end result you want whether its 4 days a week working and one of those days is from home or something else.
Have an excel sheet and list every expense you've had from bank transactions in the past year, work out what you need and what is essential. Put together your income and work out that net difference and is it enough to maintain your life style. Oh also dont forget to factor in the loan (get a preapproval to work that out) and see what that adds up in expenses, play around with interest rates doubling too to see what you would be in for and look at market rates for rental properties similiar in that area.
I find that work flexibility usually happens when you're already in a full time position for that company. its much harder moving to another organisation with a starting point to work flexible there. So do your mathematical home work first and then have an open honest convo with your boss with what you're thinking (if you have a good boss and you know they are open to discuss these things, if they are toxic i wouldn't bother)
Best AMA so far, I'm jealous of you, congratulations. I'm going to be 42 years old and saving to buy our first home… we have about $70k saved so far.
Thanks for the kind words! money saved is already good! remember there are people out there with serious amounts of debt, so you're doing well!
By the way, what you did is something I keep telling my wife to do: buy an old house in a big block of land and subdivide later. I'm just not sure if we can afford the subdivision since we are not big earners. We have like 120k before taxes combined. So far we are living in a unit paying very cheap rent, $280 a week and savings half our salary.
As long as the place is liveable (can patch and paint), rent it out and top it up on repayments, even better if its positively geared, but keep aggressively into the offset whether its interest only or interest and principal just put in money as if its both. over time when the prices do go up (could be several years later down the line) draw that equity and either buy more then or hold onto that pulled equity and buy when it drops again. When those new properties increase in value (once again could be several several years) you would hopefully have alot more equity, and perhaps you can build a duplex then. you can do some research too on how much duplexes cost as its not just what masterton says, usually you add another 20% more (p.s. dont go for masterton or those types).
good step if you have a subdividable place you can do later, but if its a smart buy the rental yield would be decent or good anyway. there are a few factors right now changing the landscape with house prices i predict dropping over the next 3 years or more and also new laws in NSW (maybe australia?) that subdividable land is 12 metres frontage width instead of 15 metres so it will be a bit more saturated now with subdividable land.
oh also check with councils on what the subdividable rules are, e.g. 500m2 minimum and 12 metres width, make sure the places have the right zoning and make sure sewer lines are at the front of the property so it'll cost you less money later on when you construct.
you'll obviously need to do more research but these are some things that come to mind off the top of my head. hope this helps!
I'm in a similar situation, but invested differently. I'm 32, married with a 1YO. Dividends from stock holdings (not in banks) cover my basic living expenses, but working for a few more years to build a buffer. Total wealth is at about $1.3m at this point, no debts at all incl. mortgage debt.
Curious to know when enough is enough? I can basically choose to do nothing, but can't really afford much more than the essentials, so trying to draw the line somewhere.
enough is enough when you choose a lifestyle you're comfortable with by working out the maths. actually someone asked me something a little similiar, i'll paste my answer below, oh and a good check is by putting all your bank transaction (over a year) into an excel to work out on average how much you do spend.
"Ultimately - To answer your question on how much cash you need to semi retire or fully retire is based on what life style you'll be happy with. Some people need 1k a week to spend on clothes and drinking at clubs or music festivals, if thats the case thats fine but know you'll have to generate net income automatically from whatever sources e.g. properties/shares above that. Also note you could have 10 million dollars worth of property but be negatively geared vs someone with 1 million dollars worth of property positively geared and getting that 1k per week from rent. The goal for most property investors is to sell property at the right time to bring loans down and therefore have more cashflow from incoming rent, hence why a lot of investors have a lot of properties and just stay afloat until they sell (but can be a dangerous game - i'm not that extreme!)."
Thanks, appreciate the response.
I have my expenses mapped out, just need to figure out where I draw the line and what sort of safety net I need. I'll likely give up work in a year or two max.
Thanks again.
Well done. Can you elaborate a bit on 'dividends from stock holdings'? What kind of investments/ stocks they are and when did you invest? What was your strategy?
Sorry for the late reply @virhlpool.
I invest in small caps, mostly through my own research. To be honest, if I were to start this process again, I would have focused on creating a separate income stream, rather than put in time to outperform the index, but I'm here now and quite enjoy it.
To be clear, I don't invest for dividends. I look for underpriced companies in the small cap ASX space, some as small as 20-30m. Over the 7 years I've done this, I've run at about 18% per annum before tax, which beats the index by a fair whack… but I've made some rookie mistakes.
As I mentioned earlier, the dividends from my current holdings are larger than my minimum living expenses, but that doesn't factor in much of a holiday, or eating out much. So I'm still working to build my portfolio a little more before I drop the IT contracting work.As I am gaining confidence in my ability to invest, I find myself concentrating my portfolio more and more. I've now become really picky in my investments, and will generally take 2-3 new positions a year. I'm also trimming my existing holdings with the aim to reduce to 6-8 positions maximum.
Some of the more experienced private investors that I know focus on 3-4 holdings, with returns north of 50% per annum without any leverage. It's astonishing just how much better returns can be if you really know what you're doing.I'm currently at about 20% cash, but I'm seeing opportunities to top up on existing holdings, so that will likely sit steady or go down.
FWIW - since my dividends cover my living expenses, my entire salary from contracting goes back into investments. Current gig pays me about $1000/day before tax and including super, and generally my daily rate sits between 850-1100, depending on the role I take. If you assume that I'm working 44 weeks a year (have averaged 46 over the last 8 years), then the $220k before tax goes toward additional investments. Sure, there's a big tax hit in that, but compound interest is a beautiful thing…
Awesome thread! Thanks so much for sharing. My questions:
What % of your net worth would you guess came from saving vs property/investment growth vs positive cash flow vs 'sweat equity' (renos/granny flats)?
Do you feel you've 'lived life' during your ride (i.e. have you traveled OS a bit, enjoyed latest tech 'enough', ate out 'enough', etc)?
Congratulations - very well done!
good question
saving cash maybe 10-15%, positive cash flow 10-15% similiarly, property investment growth 60-70%, renos and granny flats are costs to build so i would lump money generated from granny flats into that cash flow figure. Very rough estimates
i have read stories where people penny pinched, in fact my agent who is doing very well for herself has never travelled outside of australia is about 30 years old. good for her still striving to be financially free (not yet and still working) but i felt kinda bad she missed out on that and now she has a kid. I feel lucky (through hard work) that i moved up the ranks in my career so had a very good salary and hence never felt the pinch of not living life. In fact a big bucket list item for me was travelling to all 7 continents by age 30 (i missed that goal by 1 year but 31 is still better than nothing!), in total i've been to over 70-80 countries.
I also do enjoy the latest tech but i'm one of those people who will buy the latest phone, use it until the phone dies and then buy the latest phone again. Same with phones, tv's etc, i'll use them till they die rather than upgrade every year or whatever. I had a nissan pulsar 2001 model up until last year when it got written off (it was still working fine had that not happen)
We definitely eat out alot on weekends, but weekdays we eat at home and bring lunch to work. Lately i'm on a health kick and really eating really boring stuff now anyway like chicken/broccoli and not intaking sugar/salt, and just drinking water. So even visiting my friend the other day who offered a free lunch thing at his work place, i still declined.
In summary the things i splurge on are lego, high top sneakers and tech stuff when something dies and big holidays. I just came back from europe (berlin/paris/amsterdam/iceland)
I'm with you on the eating. I used to eat out a lot, but now bring boring protein + veggies meals to work mainly for health reasons, but it certain helps the hip pocket also! I also came back from Iceland late last year, an awesome place.
I normally wouldn't ask these, but it is a ask me [i]anything[/i] :)
How many properties do you have?
Which state are they in and are they inner/middle/outer/regional?
What are their rough values?
I understand if you don't want to answer these or give more vague answers. FYI I was into property heavily myself, had up to 7, but then bought two duds in Gladstone which crashed (lost almost 50%) and practically wiped me out.
i've answered these in the thread somewhere a few times, but all good. 4 houses and 1 granny flat with another one along the way. all in NSW middle and outer, rough values are 900k to 1M x 2, 750k, 650k off memory! they are likely declining anyway right now with the market, no biggie as i got good cash flow, cash buffer, and decent part time role right now.
Thats unfortunate to hear, how is gladstone now? are prices up higher than when you first bought them or are they still recovering?
@Hundo: Unfortunately I really screwed things up! Bought at $600k/530k, worth $350k/300k now. Rents are now 1/3rd. Lending is really tight and keeping a lid on things. Had a negative cascading effect on the rest of my (vic) portfolio. Good for you with strong equity, cash flows and buffers - it's needed!
I'll have to weather the storm for another year at least it seems before I can sell, it's just too dead up there.
It's almost surprising for me that you saved so much despite visiting 70-80 countries so far even if your income was high, considering that every vacation costs at $3k-$5k if not more. How did it all work out?
I think a lot of that was from not increasing my expenses and getting promotions. Most expensive was Antarctica at 20k roughly but once in a life time experience, so it was worth it.
your net worth is combined with your wife?
how much money do you make from 3 days a week?
do you have plans to go full retirement?
are you looking to buy more houses or you have already maxed the loan amount?
Thanks
hey buddy - answers are in above thread comments, been asked several times! i'm a bit risk averse so for now i'll build another granny flat and i'll sell one house later. Whether i buy more or not in the future i'll scope out the market.
Retired at 34
I'm 35, still not serious on my career. i don't think i will ever settle.
Update - looking for a window from 10th floor to jump fromi still havent settled and don't know what i truly want to do. All i know is what i dont want to do so i made a conscious effort on generating incoming on the side.
all the best buddy (don't jump! unless its for joy?) happy friday!
Ozbargain founder scotty is semi retired i assume?
Hi jaseredpanda thanks for the AMA.
1) Current govt finance grad here, mid 20's but I have the possibility to move into another grad role with an economics/policy focus along with a ~10k pay rise.
I'm doing this as I believe the new role in addition to my existing grad program will give me an extremely flexible skillset that can take on either accounting or economics-based roles keeping in mind that I honestly do enjoy both.
The money is also not important for me because I truly believe in incurring short term losses for long term gains, hence my reason on moving from a grad role to another grad role but in a completely different field. Do you think this move would be viewed negatively and do you think this would inhibit my career growth?
Is this naive of me from a careers perspective? Do people care about having broad experiences?
2) I have been wanting to move into the private sector for quite some time now, purely for the sake of experiencing both public and private sectors. However, I've heard that there is a negative connotation attached to public servants. Do you know of this being the case where public sector companies favour public grads over private?
3) What was your initial role in the canberra grad program? Was it a qualitative or quantitative role?
4) Given that I have an interest in accounting, finance and economics and have had work experience in 2 - I still do not have my sights set on any one of these disciplines - how did you 'choose' what you wanted to do? Or did you map out perfectly (as I am trying to) where you needed to go to get to where you wanted to be?
5) Do you think it is important at this stage for me to specialise?
6) Could you name and describe in detail what are some of the most important hard and soft skills graduates like me would need in the near future to stay ahead of the pack?
Hope you can answer these for me, cheers.
Not at all! although generally the last rotation is usually your home location, however nothing stops you from talking to your other rotations on going back there when you're done. I moved around 2 to 3 areas - business processing mapping, workforce planning, and HR Learning and development. By moving to a different field is definitely in line with what the grad program is all about, trying different areas and at the end going to what you feel passionate about (obviously doesn't work if the team can't fund you, but have a chat about alternatives). Something I also did was have a casual coffee catch up with a grad in that team or a team member/leader who works there to ask what are the teams goals over the FY and also what does a typical day for a grad look like. just so you know what you're getting yourself into.
the public sector is often viewed kind in a negative light in the private sector world, seen as laid back and not commercially driven financially e.g. flex time and bludging off tax payers money. Not necessarily true but i do remember working on a project but had to scrap it due to change in parliament with a new party/prime minister, threw away a 5 million dollar project that the team was working on for half a year. so in my eyes private sector prefer private sector people (unless the role is policy/legal based) or but public people in general are ok with private sector joining as they can be seen as fast paced
qualitative - initial role was process mapping, i would help teams internally and in other departments map out their current process and then map out their future process using this advanced mapping tool. main takeaway was stakeholders debating what the process currently is and also what it should be. It wasnt my ideal role but i did enjoy it being very structured and process driven which is like my personality. my 2nd rotation i had a chat with a girl in the workforce planning department because i've always liked being strategic and wanted to use my HR major from my business degree.
without knowing what i want to do (still till this day), i chose what i was most interested in out of all my options which was workforce planning based on point 3. you probably have a better idea of what you wanted to do, but i can assure you at uni or highschool i didnt even know what workforce planning was, i fell into it because i wanted a strategic HR role whatever that was. So i guess that's my advice to you, work out what you like e.g. process, creative, client facing, project types roles, and then what potential fields and map that out. then talk to people in those fields and that'll narrow it down! think carefully about what questions to ask them before meeting them. maybe even on linkedin, some people are really nice and happy to answer if not move onto someone else (no loss there)
No not at this stage since you're a grad, diversify in fields of interest but keep in touch with your rotation fields in case you want to go back there at the end of the program. Specialise later in your career, and you seem more career and skills drive than money hungry so specialisation will happen eventually anyway - no rush for you
Hard skills i would suggest looking at qualifications and tools of people at the top of their game in their field e.g. say you're a graphic designer, the good ones would have certifications in photoshop (i made that up) or web design/coding - i would suggest stalk people on linkedin at the top of their game and look at their profiles to see certifications on hard skills e.g. SQL, CA, CFA blah blah. Soft skills i would say public speaking i would say is important, if you're an effective communicator you can do anything (try toast masters if you're bad, a colleague who was awful did it and now he's fairly decent), next thing i would say is building rapport - its an art but if you're able to speak with stakeholders and people in general and have this skill where you remember they like surfing or elvis or whatever, you can build that connection through small talk each time you interact and they'll like want to deal with you.
Hope these help! keep them coming if you have more
Thank you very much for your response.
Thanks OP.
Question for you (and others) - I am 37, married with 3 young kids aged 8 and under. We have a PPOR mortgage of $380k with LVR of around 80%. We find it hard to save with a young family so should our focus be on paying off our mortgage completely or getting the LVR low enough so that we can buy another property?
Good question!
the answer is both! how you can do both right now is throwing your money into an offset account, it'll reduce the mortgage interest you pay each month as well as remaining accessible for when you want to invest. No point paying off the actual loan now because when you do decide to borrow the money you'll be pulling out the same money you gave the bank but get hit with fees etc.
I would suggest have a chat with your mortgage broker and map out your current situation and look at pretend numbers of what needs to happen for you to do X
Definitely agree. My biggest regret with my first property (which I knew was first one that we'd outgrow) was not using an offset account and was paying off principal directly.
Also regret not shopping around more when my bank told me I had to sell that property to buy the bigger place.
If your loan was interest only for a while, you can't have an offset account anyway. Offset accounts are only for P&I loans.
Hey congratz OP for FIRE.
go (profanity) yourself :DI do once a week! strong wrists!
Have you ever considered putting your money into the stock market? If no, then why not?
I just played to my strengths as i was surrounded by older work colleagues always talking about property, I sat there like a young eager beaver at lunch listening and asking questions.
I dont know much about the stock market, and it never particularly interested me. I'm sure the stock market is as profitable as the property market but not my cup of tea.
That's right. First rule of investing in anything is to know about it. That's why I shake my head when people know nothing about Bitcoin and they're willing to put their life savings in it.
Agree buddy! 2 of my friends went in hard on Bitcoin and tried to rope me in. Now they won't tell me how bad they suffered but I'm suspecting in the low 5 figures each.
What suburbs did you invest into? And what areas would you invest into now if you had the capital? Otherwise talk me through your thought process when considering a new property to invest in :)
semi retired
That's good man never go full retired
Just wanted to say thanks for the AMA OP.
You're giving generously wiht your time (even though u are retired)
My question is, do you ever wonder if what you were doing (in your workforce planninh job) is just overpaid useless corporate junk? Used by managers/corporates that hide behind consultant reports to justify their actions. In particularly when workforce planning is code for workforce culling.
Also, given you worked in decently paying jobs, earning decent bucks, would you say you are average (in terms of wealth, money) compared to your peers.
Hahaha this had my laughing
There are many types of workforce planning. Here are some off the top of my head:
call centre workforce planning: where they optimise workers shift patterns to match up with call demands and have very tight schedules so nothing falls out of SLA. To a point where you're told when to take breaks or lunches. With this type i find it fairly useful in the sense for corporations to make money
strategic workforce planning: providing forecasts to executives on what the shape and skills of their resource pool looks like. Advise on succession planning, work with recruitment team on hires and headcount planning etc. The most useful if executives take action, otherwise a waste of time
tactical workforce planning: administrative work literally moving people from being on the bench to new projects matching skills/availability. A necessary but not exciting area, can and should be replaced with a resourcing system but will still require some human interaction.
productivity or efficiency planning: measuring employee performance based on how efficiently they complete tasks against average or best practice times. Can be good e.g. cross training staff or a waste of time if executives just want to cost cut the bottom 10% of performers.
There are more but these come to mind. So to answer your question, through my experiences depending on the projects and more importantly the execs and what type of work I'm doing it can be a waste of time.
Compared To my friends you mean? Out of about 8 friends I would say I'm ranked maybe 3rd or 4th. Number 1 can retire through restaurants while number 2 and 3 earn big bucks like I was but one is materialistic and needs the income to keep up with life style and the other one is down to earth but hasn't found a good side hustle yet.
The bottom 4 ranges, from about 60k salary up to about I'm assuming 150k but relatively careless with their money.
If you meant other workforce planners I'm doing above average, the bigger bucks come from project delivery or heading up functions. Or both like I was doing near the end
Dear OP
Congrats on your achievement. Hoping you can share your thoughts.
I am 31 single male. Currently living in ppor with a savings of 300k which is currently offsetting the loan. I have 100k of loan remaining to be offset to pay no interest.
I did buy at the peak of the market and so yea for sure have felt the pinch.
I find the real estate industry is full of con artist and cheaters where the consumer ends up with little knowledge a big debt and a whole bunch of happy people (i.e. the bank, the agents, brokers, conveyancers, land developers).
Is this feeling normal? Is there a way to come out on top? I do try and keep in touch with the real estate happenings and educate myself.
At this stage I don’t seem to have the confidence in getting to the next step, largely because of dealing with people always seem like they are only looking to cheat the consumer while making maximum profits for themselves. Is there any anything you can advise? If you are in my situation what would you do?
Thanks
You over paid for a property and blame everyone else for your misfortune?
Yes I found that out really on especially when getting my first house valued. The real estate agents all gave glowing prices about 50 to 100k above what I purchased after a year. Then the banks gave me the real deal and said there has been no change on the price. End of the day agents want your money and sell and banks are generally tight. A good builder is highly important as they are the ones who can screw you over the most as it's impossible to outline everything in one contract and all scenarios.
Having said that nothing of the above circumstances change, only the timing and research you do. So if you bought during a buyers phase, you probably still got hustled out of some money from agents etc but you'll likely do well anyway when this moves onto the growth cycle. E.g. when you go to Asia and haggle over a keychain and pay 2 dollars for 10, you probably know you got ripped off but you know it's still a great bargain anyway.
However flip side if you bought during a sellers market then you are paying prices from the top and when it goes through the drop phase then you'll feel that.
Putting that all a side what i learnt earlier on is to have a good team. You'll need a decent solicitor handle your contracts (I recall mine charged 900 when exchanging contracts), a good mortgage broker to find you good deals (but also do your own homework in case you find a better rate, but show this and they'll likely match or beat it), a good account who can also provide advice too depending on your strategy you can set up trusts etc and depreciation schedules.
The above will minimise these fixed concerns, but timing and research are the big variables you'll face
I'm also in my 30's and have just over $615 in my savings account. Dont have a house yet just waiting for them to go back to 1980's prices before I jump in. You are an inspiration and my goal is to also semi retire in my 30's. Tomorrow someone might buy a lego set I purchased cheap from the sales and I will profit $50. That will bring me to $665. Not far off, one step at a time and as the saying goes 'a penny saved is a penny earned'. See you at the golf course, even if I'm the the person carrying your bag and cleaning your balls I'll feel that we both semi retired together.
Rofl!
I'm curious about that Lego set now…Just sold it, guy muscled me another $5 down not happy. Also bought a $5 mcoz meal which I obtained with the app as they always allow it for that price. Now down to $655.
Update, while sitting on the couch crunching my numbers about my semi retirement plan, something poked my behind and at my shock found a 50cent coin. Happy to say I'm going places with this retirement thing, making money and not even trying. I'm at $653.50 after buying a $2 milk and will definitely update you on my future progress. After all we are going to be golf buddies eventually and no more bag carrying for jimmy I say ;D.
@moneyhungry: Update, just bought a tatslotto ticket to speed things up a bit, don't want you to get too bored at golf course without me :D. My winning numbers for tonight's lotto draw number 3899 are 7, 9, 18, 30, 28, 2 and supps are 27, 13. Fingers crossed.
Interesting question!
I do like high top sneakers and currently I'm very into my nintendo switch (Mario party and smash coming out soon). We usually eat out on the weekends oh and I love Lego which we're currently building the UCS millennium falcon lol. Most expensive thing recently was an 82 inch tv but of course this is not a normal reoccurring thing.
I think coping was slightly easier for me as I'm generally a don't need too much to make me happy. I'm generally a bit frugal but it's not noticeable as I leave enough spending money for social activities like buying a round of drinks for my mates. I think my higher salary helped as each time I got promoted or a new higher paying job my steps were:
Increase the automatic transfers to my offset account but leaving a bit more spending money depending on the jump e.g. 100 bucks a week
Take my parents out for a meal to celebrate the news
Buy myself a gift
I do enjoy the nice things in life but I don't have collections e.g. I have 1 nice watch I bought when I was Switzerland lol, I have friends who have a collection haha.
From the sounds of things you're doing very well! Congrats so far!