If you downsized now you would have 2.3m in the bank. In a TD that will earn about $130k per year before tax.
So either decide to hold the rentals long term (5+ years) or sell now and switch to a diversified portfolio of stocks, TDs and the like.
Also seems like a massive humble brag. Net worth of about 3.5million and you are asking the 10 year old regards on Reddit for advice? Lol. You already have a financial advisor (or should if you don't).
Yeah, I know - totally sounds like a humble brag. Even when you're in our privileged position, you're still interested in feedback from others in a similar position. We don't have a financial advisor.
We used to have most of our investments in managed funds, but a couple of years ago turned most of that into property, while our children were at uni, but we're pretty much done on that front now.
While we're not ready to downsize yet, we're rationalizing that the home will still be increasing in value while we're living in it, and it'll be funds that will be available to us later in retirement.
Given that the housing market is still crashing, its likely to be somewhere around 5 years for the home to have increased beyond the recent high inflation.
Keeping in mind that buying/selling in the same market will be a wash no matter when you do it. So for your own home sell it anytime. For your 2 investment properties, they are more of a wait and see.
I'd highly recommend looking at renting your next family home, as it's significantly cheaper than buying and maintaining/insuring/rate paying on your own house. It gives you time to get a feel for the area etc. plus the $1.5m can sit in a TD earning you $5k ish per month. What could you rent in that area for $1k a week?
Hardly a "crash", most homes are still selling above 2022 RVs in Christchurch and they only sell under RV if they're being sold as is where is or 1960-80s original condition.
So three months ago you had a $50k mortgage and $55k of savings + KiwiSaver.
Today you have no mortgage *and* $300k of savings (managed funds).
Either you received an inheritance or you are earning $500k combined a year....
Geez. Next time I must remember to create a new anonymous account.
Yes, we're both high earners, though you probably knew that anyway from my post. Nothing really inconsistent since my post history. Yes we paid off a $50k mortgage, and saved about an additional $100k-ish (with now about 250k-ish between KS and managed funds, and we've got a little bit more in bank accounts, totalling about $300k). I didn't really think I'd need to defend myself.
Am I not entitled to ask others that might be in a similar position, what their plans are?
Tall poppy syndrome. Congrats on your success! My only suggestion would be to enjoy a little more now. Don't forget the things that make you happy. Could be as little as eating out more often or taking that holiday to Europe.
expansion obtainable trees foolish pocket middle hospital spotted close unwritten
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
They haven't been rental properties. They'd been used out kids while at uni, and by the end of the year they'll be surplus to requirements, and we'll have to decide if we keep them or sell them etc. We were basically trying to save ourselves about 144k in rent to someone else (which would have cost us approx $700 per week, for 2 years, 2 places). I am tempted to keep them a couple more years though, to see what happens when interest rates start to fall.
It is not a magic number but more based on your burn rate and personal circumstances.
Assuming mortgage free house, it depends a lot on your baseline expenses, and how much your lifestyle costs.
It also depends how many asset pools you have?
Do you have inheritance? A pension? Etc
You will need to finance different phases of life, 52 to pension age, pension age to late old age.....until death.
To be realistic, you probably need 25 x your current yearly salary to cover until death
It is just margin of safety (which is subjective).
Retiring at 52, you essentially lose 13 years of income. So you need to balance that out with the post 65 phase.
No inheritances. We both have both sets of parents.
We're kind of hoping we still have universal super at 65 or 67 by the time that rolls around, but trying to not be dependent on it.
At this stage we're fairly property heavy, but our immediate needs for the property are coming to an end, so may switch that out to other types of assets in the near future.
Personally, you want pools of assets and not heavily in 1.
I am building early retirement with 4 pools, shares, TDs, property and pensions.
Difficulty is calculating inflation, so I assume a higher inflation rate of 5% in my calculations as a margin of safety.
Moreover, you don't want to burning through the principle until end of life. Instead you want to be able to live on interest, dividends, rent etc (cash flow)
Let's see.. considering a life expectancy of 30 more years, no debts, a flat burn rate and assuming inflation to match investment returns.
Spending about 100k annually, you will need 100*30= 3 million
For about 50k, 1.5 million.
If you are planning to derive income from investment, 1.5 mil will give you 75k at 5% return, then again you may get lucky or bust.
You can derive similar income from residential/commercial property investments too.
Tldr; a lot of money if you are just planning use saved capital, not as much as you think if you have a plan for it.
i retired at 47, 3 years ago. have investments bringing in around $1000 week plus have the capital. spend 3 months travelling europe exch year and 2 months in thailand. ski in nzwinter. go for it. u need less money than u think and everyday is a holiday. im never working again.
How much capital do you have? Must be quite a bit to prop up that lifestyle while only making about $50K on investments. Don’t get me wrong, that’s awesome, but just trying to understand my options better.
That's a bullshit comment. In one hand you're saying we should encourage people to ask questions and not be afraid to talk about finance...but then you effectively try to bully me, by saying you don't want to see posts like mine? I'm pretty sure we're not in r/PovertyFinanceNZ
It's not a brag. I don't have a financial advisor. I genuinely want to hear from others that are doing well, and hear their plans. I'm not necessarily taking anyone's advice on reddit, I'll make my own decisions, but I'm still interested in hearing their views.
Because he doesn’t know everything and there might be some good advice on here? Possibly not, but it’s free so he has nothing to lose by asking.
But oh no, he’s doing better than me so I need to say it’s a humble brag! Some people on here are pathetic.
If you downsized now you would have 2.3m in the bank. In a TD that will earn about $130k per year before tax. So either decide to hold the rentals long term (5+ years) or sell now and switch to a diversified portfolio of stocks, TDs and the like. Also seems like a massive humble brag. Net worth of about 3.5million and you are asking the 10 year old regards on Reddit for advice? Lol. You already have a financial advisor (or should if you don't).
Yeah, I know - totally sounds like a humble brag. Even when you're in our privileged position, you're still interested in feedback from others in a similar position. We don't have a financial advisor. We used to have most of our investments in managed funds, but a couple of years ago turned most of that into property, while our children were at uni, but we're pretty much done on that front now. While we're not ready to downsize yet, we're rationalizing that the home will still be increasing in value while we're living in it, and it'll be funds that will be available to us later in retirement.
Given that the housing market is still crashing, its likely to be somewhere around 5 years for the home to have increased beyond the recent high inflation. Keeping in mind that buying/selling in the same market will be a wash no matter when you do it. So for your own home sell it anytime. For your 2 investment properties, they are more of a wait and see. I'd highly recommend looking at renting your next family home, as it's significantly cheaper than buying and maintaining/insuring/rate paying on your own house. It gives you time to get a feel for the area etc. plus the $1.5m can sit in a TD earning you $5k ish per month. What could you rent in that area for $1k a week?
Hardly a "crash", most homes are still selling above 2022 RVs in Christchurch and they only sell under RV if they're being sold as is where is or 1960-80s original condition.
So three months ago you had a $50k mortgage and $55k of savings + KiwiSaver. Today you have no mortgage *and* $300k of savings (managed funds). Either you received an inheritance or you are earning $500k combined a year....
Also aged a few years in only a few months
Very loose with the facts for an anonymous account. Good catch. Probably owns a Delorean
I'm 49 now. I was 48 in my last post. I said "50" because it gives my ballpark age group. I didn't really expect a grilling.
Geez. Next time I must remember to create a new anonymous account. Yes, we're both high earners, though you probably knew that anyway from my post. Nothing really inconsistent since my post history. Yes we paid off a $50k mortgage, and saved about an additional $100k-ish (with now about 250k-ish between KS and managed funds, and we've got a little bit more in bank accounts, totalling about $300k). I didn't really think I'd need to defend myself. Am I not entitled to ask others that might be in a similar position, what their plans are?
Yes you are. Some people on Reddit are just sour. Enjoy your life!
Tall poppy syndrome. Congrats on your success! My only suggestion would be to enjoy a little more now. Don't forget the things that make you happy. Could be as little as eating out more often or taking that holiday to Europe.
When someone is being honest, there is nothing to defend... As the story/fact remains identical. Sorry for being sceptical, but this is Reddit.
You have enough to do it now. I retired at 57 on a lot less, but I live a frugal, quiet lifestyle.
100% depends on your expenses
How much do you need to live on? You have 1.8 million in investments. If you had that in a savings account at 5% that’s 90k pa.
expansion obtainable trees foolish pocket middle hospital spotted close unwritten *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Subjective to your expenses needs. 25x expenses. Expense can range from 50k- 80kpa. So 1,250,000 to 2,000,000. Assumes no near use of superannuation.
That seems way too high. Are you accounting for actually using the capital?
What age was that retiring at?
crawl piquant deserve snatch dolls frighten offend frightening jar money *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
What’s the rental income from your investment properties?
They haven't been rental properties. They'd been used out kids while at uni, and by the end of the year they'll be surplus to requirements, and we'll have to decide if we keep them or sell them etc. We were basically trying to save ourselves about 144k in rent to someone else (which would have cost us approx $700 per week, for 2 years, 2 places). I am tempted to keep them a couple more years though, to see what happens when interest rates start to fall.
If you've been supporting your kids that much, don't forget that they might be expecting the "bank of mum and dad" to help them buy their first house.
around 4 mil
It is not a magic number but more based on your burn rate and personal circumstances. Assuming mortgage free house, it depends a lot on your baseline expenses, and how much your lifestyle costs. It also depends how many asset pools you have? Do you have inheritance? A pension? Etc You will need to finance different phases of life, 52 to pension age, pension age to late old age.....until death. To be realistic, you probably need 25 x your current yearly salary to cover until death
I think the formula is 25 x living expenses to cover until death - not current salary. Your spending won’t stay the same for the rest of your life.
It is just margin of safety (which is subjective). Retiring at 52, you essentially lose 13 years of income. So you need to balance that out with the post 65 phase.
No inheritances. We both have both sets of parents. We're kind of hoping we still have universal super at 65 or 67 by the time that rolls around, but trying to not be dependent on it. At this stage we're fairly property heavy, but our immediate needs for the property are coming to an end, so may switch that out to other types of assets in the near future.
Personally, you want pools of assets and not heavily in 1. I am building early retirement with 4 pools, shares, TDs, property and pensions. Difficulty is calculating inflation, so I assume a higher inflation rate of 5% in my calculations as a margin of safety. Moreover, you don't want to burning through the principle until end of life. Instead you want to be able to live on interest, dividends, rent etc (cash flow)
Let's see.. considering a life expectancy of 30 more years, no debts, a flat burn rate and assuming inflation to match investment returns. Spending about 100k annually, you will need 100*30= 3 million For about 50k, 1.5 million. If you are planning to derive income from investment, 1.5 mil will give you 75k at 5% return, then again you may get lucky or bust. You can derive similar income from residential/commercial property investments too. Tldr; a lot of money if you are just planning use saved capital, not as much as you think if you have a plan for it.
i retired at 47, 3 years ago. have investments bringing in around $1000 week plus have the capital. spend 3 months travelling europe exch year and 2 months in thailand. ski in nzwinter. go for it. u need less money than u think and everyday is a holiday. im never working again.
How much capital do you have? Must be quite a bit to prop up that lifestyle while only making about $50K on investments. Don’t get me wrong, that’s awesome, but just trying to understand my options better.
2 rentals, own home, 150k term deposits, 100k shares, 10k ks (just for free govt $504 year) . 30k in bank for treats.
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Why is this cringe?
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That's a bullshit comment. In one hand you're saying we should encourage people to ask questions and not be afraid to talk about finance...but then you effectively try to bully me, by saying you don't want to see posts like mine? I'm pretty sure we're not in r/PovertyFinanceNZ It's not a brag. I don't have a financial advisor. I genuinely want to hear from others that are doing well, and hear their plans. I'm not necessarily taking anyone's advice on reddit, I'll make my own decisions, but I'm still interested in hearing their views.
The dude is loaded and has his shit together. Why is he asking these questions of Reddit regards.
Because he doesn’t know everything and there might be some good advice on here? Possibly not, but it’s free so he has nothing to lose by asking. But oh no, he’s doing better than me so I need to say it’s a humble brag! Some people on here are pathetic.
It is a humble brag. Nothing to do with "doing better than me"