Where are you at, and where do you want to go?

Hi all

Current situation, 24, not married and no kids, income 76k. 2 IPs and just sold out of my managed funds. Net worth approx 130k.

I'm looking at buying a duplex/splitter site in Brisbane sometime soon with the intention to develop. I'm looking to retire at about 40, but hopefully will happen sooner than that. I will probably buy more managed funds down the track, but want to try something different for now.

I think the great run of shares/LPTs will slow..

 

A good read everyone, some good stories!

My own run down:

My wife & I are 26. Got married about 3 years ago, about $50k in the hole from stupid spending when we were younger (car loans, credit cards, etc).
Got our PPOR about 2 years ago, not the greatest suburb in the world, but plenty of room for us and affordable for us. Best thing we did was not mortgage to our necks on our own residence, so many people now are borrowing so much that it takes 1 whole income or more to cover the repayments - doesnt give much breathing room!
1 year ago got our first investment property. My brother is single and with property prices going up in Perth, the options for investments for him were limited so he went in 30% on the IP. Luckily the Perth boom was underway, so our PPOR went up by around $180k, and our IP went up by around $100k.
We are incredibly lucky that we got in when we did over here, certainly helped with our debt situation.
We were hoping to get cranking on a property in Brisbane, but we have our first kid on the way in a couple of months, so dont really want to get another negatively geared property just yet (our IP costs us about $100 a week before any tax consideration and obviously losing the wife's income very soon). Although we were keen to do it, cashflow is your lifeblood so we dont want to leave that on the knifes edge when we have no idea what to expect with the baby!
In the process of investing $60k from a LOC against our PPOR into some managed funds, after which we will margin lend another $60k.
We will also get (hopefully) $50k out of our IP (through LOC), and invest that in some managed funds as well, and margin lend another $50k on that.
The aim in the short term is to get the IP shortfall covered from the $100k managed fund investment (basically need yield of around 5% above interest rate for that). The aim of the $120k portfolio is simply to cover the interest and reinvest the balance.
Long term strategy: at least one IP per year, any leftover equity each year gets ripped out through LOC and pumped into the managed fund portfolio.
No specific retirement objectives, its all about giving ourselves options, whether we choose to do some travel, start a business, whatever. I guess the most exciting goal for me is to get to a point where our portfolio is returning (net) as much or more than we earn in our jobs.
The hardest thing for me is to sit back, stick to the plan and enjoy the journey. I want to jump in 110% on everything, and have everything happen immediately! Patience is something I am doing my best to work on!

 

I started this thread a while ago now, is anyone else interested in posting their story, or an update, or just general info on what they've been up to as of late?

Andrew.

 

Wow, 24 and already with 2 IPs and a great salary. What industry are you in?

Any tips for a newbie starting in property.

 

As a newbie/lurker I would like to add my 2c worth. Having attended the Navra course on Saturday, it will be a great help to me to actually put down on paper where I'm up to as I don't tend to pay much mind to where I'm at on a regular basis.

I'm on the wrong side of 35 and have never been an investor or even cared about my financial future until 2002. I'm single with no kids but living with my partner whom I intend to grow old with. Bought my first house in 2002 on a very busy road in Logan which I lived in until I sold it last December. Bought my first IP, a 2 bed townhouse in Rochedale a month after the house and sold it in 2005. Purchased 2 dogboxes on large blocks in Ipswich which I might develop one day in the future and for some unknown reason also purchased a unit in Ayr (Nth Qld) which surprisingly has doubled in value.

Currently studying full time and living off the money from the sale of my Logan house but trading shares for some income as well.

IP 1 value = $220000 approx owe $167000
IP 2 value = $250000 approx owe $168000
IP 3 value = $145000 approx owe $62000
Managed funds and shares value = $99000 Margin Loan = $54000
Cash in offset accounts = $45000
So right now my net worth is about $308000 so not too bad seeing I only had $10,000 and a part time job to my name 5 years ago.

Anyway, once I graduate next year I hope to pay off the small loan on the unit and redraw as much as I can out of it to invest in funds/shares for income and buy more property for capital growth (nice property - not dogboxes). I have no plans to retire any time soon but would like to be financially independant by 50 in case of retrenchment or whatever.

 

Update:

Age: 30

Work: IT stuff.

Living arrangements: Wife, dog, renting.

Worth: $625k or so + super.

Made up of:

* equity in an investment property which will hopefully be PPOR in a year or two's time

* managed funds via margin loan

Goals:

* Sell managed funds to pay off PPOR outright
* Redraw PPOR equity to invest in shares etc to increase equity so as to be financially independent by 40.

 

That seems to be a fairly limited exposure to asset classes? What about international property, resources, small caps, asia?

With that mix, I don't think you will achieve 20%+ PA as it seems rather a conservative fund mix..

 

Actually I now only need my net worth to increase 12% per year (compounded) for the next decade.

Given leverage and two salaries I reckon we'll make it.

That being said, my portfolio will look different when I sell it and start again.

 

Update

Property (PPOR & 2 IP's) value $865k
Offset account value $50k
Managed Funds & small amount of Shares value $1,434k
Small amount of super value $100k

Assets $2,449,000

Debt on Property value $692,750 (app. 80%)
Margin loan value $648,240
2 x credit cards value $11,500 (though always paid out monthly).
Tax man owed app. $27k

Liabilities $1,379,490

Net worth app $1,069,510

Am in the process of buying IP#3 in Lutwyche, Brisbane for $398k & adding deposit & costs to margin loan which will bring it back up to just over 50% LVR. Balance will be new bank loan.

That will bring the total debt up to app $1.795M which scares the living day lights out of most of my family, friends & at times, ME.
Were living in Sate Housing just 9 years ago

 

Gad

I've said it before but I'll say it again...you Sir are an inspiration to us all.

Discipline and vision have paid off and will keep paying off for you.

Cheers
N.

 

Hey, thank you Nigel.

I'm not sure I want to inspire anyone. Come one hell of a major market crash & it could all go down the gurgler, which is a constant fear.

Still, it would be fantastic to give ourselves a self funded retirement. To actually be able to go & live where we want, eat out, travel ect ect would be just so fantastic. Well worth these few years of sacrifice.
Love telling my two daughters that my debt will be their inheritance he he
(it won't be but I do love telling them it will be, wicked sense of humour he he).

 

Wow, I can't wait until $1,434,000 is a "small" amount to me. At the moment it is inconceivable.

I guess an attitude change to $$$ amounts is a necessity to achieving financial goals.

 

Hi NatMarie73

Let me just clear that up a little.
What I meant by that above statement was, if you break it down, is:
$1.405k odd in managed funds & a small amount of shares, which = $29k odd.
Hope that clarifies it a little as I certainly don't consider $$1.4M odd as a small amount.

Take care

 

gad, how did you manage up double your assets from 1 mil to 2 mil in 12 months? Did you invest your money into the challenger china fund?

 

G'day crc_error

In my original post I did not include the property values & super.

During that time I refinanced all 3 properties to Westpac at 85% LVR & added that extra available equity to the MF's as well as increasing the margin loan ect

 

Gad,
Thanks for your update - and let me say WOW! Well done for cracking the $1M mark!

Andrew.

 

Where are we at?

Aged 39.
Married.

Debts
motorbike loan $5700, minimum payment $430 pm
overdraft $2000,
credit card $1700
Wife's credit card $3000
mortgage $167000

Assets
ppor $200000
managed funds and shares $5000


Where do we want to go?
My wife and I are both in debt reduction mode currently even though we parked some money over the year in funds (and I took a small punt on Paladin at 7.25 a share)
By Feb I should have the motorbike loan paid.
I should have the credit card paid off in March or April.
The overdraft I might leave for the time being as the interest is costing only about $17 a month
Over the course of the year we want to save up as much as we can in funds (cfs geared share for growth, navra retail for income) and then at the end of 2008, or the first quarter of 2009 we want to get the equity out of our current ppor, and use that to purchase a ppor to approx 280k. The current house will become our rental, and hopefully the funds will fund the holding costs.

After that, a balance of houses and funds...over time becoming more and more cash flow positive....untill I can retire

 

Where are we at?

Married, 1 child [3.5 years]
Me: 39 yrs Wife: 38 yrs

Joint Income: $100K pa

Assets

PPOR $550K
IP#1 $450K
IP#2 $375K
M/Funds $300K
Super $300K

Total $1975K

Liabilities

PPOR $140K Limit $200K
IP#1 $226K
IP#2 $265K
M/Funds $170K
LOC $220K Limit $400K

Total $1021K

Where do we want to go?

Purchased last IP in 2005 and have recently had all RE assets revalued to increase LOC to 80% LVR. Am attempting to recycle debt at present using MF income to reduce PPOR debt and capitalising margin loan interest and shortfall of holding costs on IP's via the LOC. Am torn between purchasing IP#3 or increasing Managed Funds [Navra Retail] to increase the distributions and accelerate the repayment of the PPOR debt.

Goals are to work hard for another 10 years with a view to winding back the hours in our day jobs, living off investments until super kicks in at 60yrs.

Once the PPOR is paid out [less than 2 years], plan to ramp up the IP acquisitions to achieve the growth in assets and net worth.

At the same time, plan to "smell the roses" along the way and enjoy some travel and extended leave [long service leave] to share time with our child as she grows up.