Retire by 25.

Discussion in 'Investment Strategy' started by Aigar, 19th Jan, 2018.

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  1. Aigar

    Aigar Member

    Joined:
    19th Jan, 2018
    Posts:
    7
    Location:
    Melbourne
    Hey, just turned 22 and I'd like some insight and advice on how I can retire by 25 or end of 25 years old. It seems ridiculous but here's my current situation.
    • I'm 22 in Melbourne, self employed.
    • I have 400k in a savings account, net $300k/yr
    • After discussions with my local westpac I can borrow upto 1.2 mill for property opportunities at 20% deposit(s).
    • I rent a home + pay bills for my family ($3k/month) + an office (2k/month) and about 2.5k-5k/month on misc **** that pops up like family asking for money, fines etc that I wish I could just run away from.
    • I have no debts, paid off hecs and centrelink debts when i dropped out of uni at 20
    • Paid 40k taxes for 2016-2017 year, not looking forward of 2017-2018 taxes.
    My goals:
    • x2 owner occupied homes (1 for my mom/siblings and 1 for myself) (worth 1.5-2.5 mill combined)
    • 10k+/month passive income by 25
    So, with that info/background, what would you recommend I do next. I like my current job but I'm glued to a computer 16+ hours a day and haven't had a social life since I was 16.
     
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  2. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
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    Location:
    QLD
    welcome to InvestChat ,

    sorry , but i am going to call your plan ridiculous for one reason ( despite your commendable aims )

    you are looking to borrow money when the return of inflation is very possible .

    inflation means your interest payments and other costs will rise more quickly than your income ( from most sources )

    have yourself ( and family ) set up by 25 ... yes you might manage that , but it would be wise to have a job ( or small business ) to keep you ( your brain ) active and so extra reliable cash coming in .

    sorry i am not an expert on social lives , but i did discover hobbies ( sometimes they even turn into profitable investments/businesses )

    forward planning is very hard , try to keep some flexibility in the plan

    have you thought of moving away from big cities , that $400k ( plus whatever you save up to the settlement date ) might get you those houses with minimal ( or no finance ) needed

    assuming there is a property price downturn in the next two years , you might be surprised at what you can afford .

    it is nice to see you are low debt now .. but is this the time to take on some debt ??
     
  3. Hodor

    Hodor Well-Known Member

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    Location:
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    Will you be able to sell your business for a sum in the future?

    Owning a successful business is generally considered the best cashflow (as it appears you have worked out). Generally requires input however.

    Leveraged resi property isn't going to provide you the cashflow you desire in that timeframe.

    Sounds like your 300k net per year is before living costs. Is this likely to grow? How much can you save/invest?

    Any plan to retire on 10k a month in 3 years from where you are is going to require significant risk and you may end up going no where.
     
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  4. twisted strategies

    twisted strategies Well-Known Member

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    Location:
    QLD
    but Aigar ,

    is young and bold , just a dash of caution a splash of financial chaos in the world and the hopes might be achieved ( maybe even exceeded )

    i am not sure the retirement after attainment of goals will be so satisfying , the rest of your life can be a long time ... how about a nice holiday and see how that works , first ??
     
  5. kum yin lau

    kum yin lau Well-Known Member

    Joined:
    24th Jul, 2015
    Posts:
    208
    Location:
    sa
    Hi, it's an interesting academic exercise. We start from the end. 10K p.m. is 120K p.a. At 5%. it means a net worth of at least 2.4M with 2 homes worth 3M, that's 5.5M net worth.

    You have 400K and 300K p.a. income. And 3 years left to accumulate 5.5M

    Work the numbers, maybe you know something that the rest of us don't. I'd like to know the answer.

    Kudos to you for the big numbers. Your position is enviable.

    KY
     
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  6. Sargent

    Sargent Member

    Joined:
    14th Mar, 2018
    Posts:
    8
    Location:
    Sydney
    Is the idea that youve paid off the debt of those two houses by the time you turn 25?

    If not, then that will eat into your 10k/month passive income.

    You say that you're in a job but also say that youre self-employed? One of the quickest ways to build wealth is through your own business - if you don't have your own business, maybe you can start one?

    As a side note, you can always buy things, houses, experiences etc but you can never buy time (or youth). Is racing to retirement how you want to spend your early 20s?
     
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