A reasonable level of income?

Tysonboss1 · 15 August 2008

Spaghetti said:
it comes to a lot less than we actually spend.

Maybe need to go on a budget, like yesterday!

.

Sounds like your running a leaking ship.

Spend some time examining where all those $$$ that you spend impulsively go and try to plug some of the holes where you are leaking. every time you go to spend a $ ask your self

do I really need to spend this?
is there a cheaper alternative?
can I use this product more sparingly so I buy it less frequently?
Can I negotiate a better price?
Can I shop around?
Can I do it myself rather than pay some one?
will it really impact my life if I don't get that luxuary item today?

jonojpsg · 15 August 2008

OUr budget for a reasonable level of living with two young kids, private health cover, only one car (I ride to work), is about $32k before mortgage repayments.

I would assume that after we pay the house off and the kids move out (although that's a long way off yet!!) that we could easily live on $40k a year (todays $$) and include some travel.

With a conservative return of 7% p.a., that means I need about $580k in super & other investments for me & the mrs to retire on, which is not that bad really - looking forward to getting there by 50 if I can

Spaghetti · 15 August 2008

Yes, start thinking about it then there is ...

newspaper/magazines/sibscritpions/books
Optical
Dental
Cosmetic
arty decorative stuff
dry cleaning
birthday and christmas gifts
plants and gardening supplies
expensive espresso blends that just sit in the fridge
computer expenses like virus software, upgrade and new purchases
video store rentals
norty stops at bakery
credit card expense
bank fees

And I hate shopping!

Need to spend more time auditing my own books rather than potential companies on stock market.

spartn · 15 August 2008

Hi Guyz

I don't think that you put down 'income' as the only factor. Its also what you for a job. Fore instance if you are making say $150,000 working for someone, but if have no time to spend with your family and children and are travelling alot it is plan and simply not worth it. I am still pretty young but I have quit jobs paying $85,000 because of this reason, and got a job working for another firm for $65,000 a year because the hours were alot more flexible, I also have a younger mate around 24 years old who makes around $1,600 a week but he is working Midnight - Midday pretty much 13 out of 14 days a week.

If you want to have a good life and not just have money in the bank I highly suggest you don't go the 'employee' way of doing it, and if you do 'don't really on your job as your only form of income'.

I know many friends who have done very well income wise from owning there own businesses. One of them makes concrete water tanks, has a 110 square house in Greenvale which his paid off. All this even though he rarely works more than 3-4 days a week.

Put plan and simple. If you are going to be an employee for the rest of your life, you will either be 'rich in money' or 'rich in time' you will rarely be both especially now days.

A reasonable level of income for me is the on i am getting now ($65,000). However, I fully paid of my house nearly 1.5 years. If I was still paying it off $80,000 -$90,000 a year is okay, with no kids.

Spartn

:viking:

Garpal Gumnut · 15 August 2008

spartn said:
Hi Guyz

I don't think that you put down 'income' as the only factor. Its also what you for a job. Fore instance if you are making say $150,000 working for someone, but if have no time to spend with your family and children and are travelling alot it is plan and simply not worth it. I am still pretty young but I have quit jobs paying $85,000 because of this reason, and got a job working for another firm for $65,000 a year because the hours were alot more flexible, I also have a younger mate around 24 years old who makes around $1,600 a week but he is working Midnight - Midday pretty much 13 out of 14 days a week.

If you want to have a good life and not just have money in the bank I highly suggest you don't go the 'employee' way of doing it, and if you do 'don't really on your job as your only form of income'.

I know many friends who have done very well income wise from owning there own businesses. One of them makes concrete water tanks, has a 110 square house in Greenvale which his paid off. All this even though he rarely works more than 3-4 days a week.

Put plan and simple. If you are going to be an employee for the rest of your life, you will either be 'rich in money' or 'rich in time' you will rarely be both especially now days.

A reasonable level of income for me is the on i am getting now ($65,000). However, I fully paid of my house nearly 1.5 years. If I was still paying it off $80,000 -$90,000 a year is okay, with no kids.

Spartn

:viking:

I couldn't agree more.

Pay off your house.

Grow your own vegs.

If room have your own chooks and any other productive animals.

Walk, cycle or drive a reliable old car or motorbike.

Join the local library.

Buy from local markets or discount stores.

Enjoy simple things.

Two should live a very rich life with $35,000 per couple if the above followed.

ps holiday in countries with crap currencies, e.g South Africa, S.Korea.

gg

theasxgorilla · 15 August 2008

jonojpsg said:
With a conservative return of 7% p.a., that means I need about $580k in super & other investments for me & the mrs to retire on, which is not that bad really - looking forward to getting there by 50 if I can

A lot of experts (for what it's worth) think that 7% may not be as conservative for the next 10 years as it seems in the context of the last 20.

nioka · 15 August 2008

theasxgorilla said:
A lot of experts (for what it's worth) think that 7% may not be as conservative for the next 10 years as it seems in the context of the last 20.

The return has to be such that taxation and inflation are taken into account. In my experience I have found that when returns are great then inflation is high and so is tax. I've chosen to have a greater portion of my assets tied up in property where the returns aren't all that flash but inflation is covered long term, tax is effectively lower and security is high. Then I use the stock market to get that extra bit. Sometimes it is a big bit, sometimes a little bit but if it is bad then I don't lose out too much and I wont be out in the street.

theasxgorilla · 15 August 2008

nioka said:
The return has to be such that taxation and inflation are taken into account. In my experience I have found that when returns are great then inflation is high and so is tax. I've chosen to have a greater portion of my assets tied up in property where the returns aren't all that flash but inflation is covered long term, tax is effectively lower and security is high. Then I use the stock market to get that extra bit. Sometimes it is a big bit, sometimes a little bit but if it is bad then I don't lose out too much and I wont be out in the street.

What about the hassle of residential property (tennant management) versus the relative hassle free management of a share portfolio?

Largesse · 15 August 2008

theasxgorilla said:
What about the hassle of residential property (tennant management) versus the relative hassle free management of a share portfolio?

and the can of worms gets opened...

theasxgorilla · 15 August 2008

Largesse said:
and the can of worms gets opened...

I wasn't being facetious, honest.

People live well over here, prior to and during retirement. Few people have direct investments in property. Personally, if I can avoid what I perceive to be the hassle of having to administer a residential property porfolio at that age I will...and I think there are alternatives.

nioka · 15 August 2008

theasxgorilla said:
What about the hassle of residential property (tennant management) versus the relative hassle free management of a share portfolio?

Try commercial property. There you have commercial leases with cpi increases, maintenance conditions, hardly ever a bad tennant and if you have a bad tennant it is relatively easy to get them out. The building construction is basically bomb proof. You can have a condition that the tennant pays the rates, pays for landscaping maintenance etc. Forget the hassle with grubby careless residential tennants. You don't even need an agent to collect rent. You just have a clause where the rent is done by bank transfer into your account.

And there are no can of worms.

Largesse · 15 August 2008

nioka said:
Try commercial property. There you have commercial leases with cpi increases, maintenance conditions, hardly ever a bad tennant and if you have a bad tennant it is relatively easy to get them out. The building construction is basically bomb proof. You can have a condition that the tennant pays the rates, pays for landscaping maintenance etc. Forget the hassle with grubby careless residential tennants. You don't even need an agent to collect rent. You just have a clause where the rent is done by bank transfer into your account.

And there are no can of worms.

not to mention better yields.

Tysonboss1 · 16 August 2008

theasxgorilla said:
What about the hassle of residential property (tennant management) versus the relative hassle free management of a share portfolio?

Each to their own,

For me if I was going to retire I would want a decent amount of my income held in property, Rent is paid weekly and increased with inflation and the capital is generally protected from inflation as well.

I don't understand the arrguement people use saying that tenants are a problem and a reason to not invest in property, If you rent think about how many hours a week your land lord spends looking after your property, I would say I can manage a portfoilio of about 10 properties using just 1 hour a week.

In retirement I want my money held in a stable asset class that spins of regular cash flow, property does this.

the share market is fantastic, How ever having the bulk of funds invested in an asset class that is so volitile when you are in retirement is very dangerous.

There are people who at the moment have had some of the dividends that they live off cut, so they have no option but to draw down capital when the market is at a low piont, mean while weekly rents in most areas are on the way up.

Tysonboss1 · 16 August 2008

nioka said:
Try commercial property. There you have commercial leases with cpi increases, maintenance conditions, hardly ever a bad tennant and if you have a bad tennant it is relatively easy to get them out. The building construction is basically bomb proof. You can have a condition that the tennant pays the rates, pays for landscaping maintenance etc. Forget the hassle with grubby careless residential tennants. You don't even need an agent to collect rent. You just have a clause where the rent is done by bank transfer into your account.

And there are no can of worms.

Commerial property is also very dangerous in retirement,... the average vacancy of a commerial property is 6 months, longer in a recession.

If I were to retire I would want a spread of residential property, Shares, Fixed Interest and cash. If I did want to get into commerial property it would be through a listed or unlisted trust where I have the benefit of the higher returns but my money is spread accross a bunch of properties rather than 1 that I held directly.

son of baglimit · 16 August 2008

from observations.....

single income family, own home, no mortgage, couple of kids in school, eligible for FTB on that $50k are easily able to cope, as long as they manage to keep there expenses in check AND know how to shop.

nioka · 16 August 2008

Tysonboss1 said:
Commerial property is also very dangerous in retirement,... the average vacancy of a commerial property is 6 months, longer in a recession..

Never had a vacancy have held as many as 15 units at one time. Have had to open businesses myself three times to get a tennant and each time have made extra by having a going business for sale as well.
At one time I had 100 storage units with never less than 80% occupancy.

pennywise75 · 16 August 2008

Well I plan on living on one of my kids lounge

so 50K would be sweet

nioka · 16 August 2008

Tysonboss1 said:
Commerial property is also very dangerous in retirement,... the average vacancy of a commerial property is 6 months, longer in a recession.

I had a drive around two local industrial estates today. I could not see any unoccupied commercial buildings?????

Tysonboss1 · 16 August 2008

nioka said:
I had a drive around two local industrial estates today. I could not see any unoccupied commercial buildings?????

yes but once one does become vacant it can take along time to find a new tenant,

I am not saying that commerial properties suffer from huge vacancy rates, they don't they have very small tenant turn over, What I am saying however is that when a commerial or industrial property does become vacant then it's not like residential where you can normally have another tenant within a day or two it can take months somtimes years to find another tenant.

So if a retired couple put all there nest egg into one direct commerial property investment then they are taking a big risk of not having cashflow for months,

Tysonboss1 · 16 August 2008

nioka said:
I had a drive around two local industrial estates today. I could not see any unoccupied commercial buildings?????

in my street there are about 25 retail shop fronts, 4 are vacant,

1 vacant for 2 years,
2 vacant for about 1 year
and the other vacant for 6 months and the owner just spent $14,000 on fit out to attract a tenant.

Businesses go bust all the time and the good businesses can out grow there site, if you fail to consider the vacancy risk with commerial properties then you are in trouble

A reasonable level of income?

Tysonboss1

jonojpsg

Spaghetti

spartn

Garpal Gumnut

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theasxgorilla

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nioka

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Largesse

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Tysonboss1

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son of baglimit

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pennywise75

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