Financial Independence (Home Ownership, Super, Long Retirement) not possible for wage earners: What do we need and how do we get it?

[tech/a]

Or for those that want need a video to explain the same concept see below. This was explained to me at a young age, I took it to heart at 14 and retired from my day job at 36 with a couple of million, today I am in my 40's and in the low 8 Figures, compounding is amazing.

Super impressive even $2 million to $10 million in 4- 10 years.

Some very important parts of the puzzle already in this thread.
At least one confirms my opening statement re P.A.Y.E employment.

 

[Knobby22]

$300K is enough.
People get too wrapped up with money.
You have to spend it though. (20k a year + pension.)
If you run out, sell part of the house.

 

[Value Collector]

Super impressive even $2 million to $10 million in 4- 10 years.

Some very important parts of the puzzle already in this thread.
At least one confirms my opening statement re P.A.Y.E employment.

FMG went from about $3 to $29 over that time, and paid me about $2 Million in dividends, so that helped a lot.

And I started out as a Regular employee, used it to kick start the compounding cycle, it doesn’t matter where you get your money, as long as you spend less than you earn and invest those savings well.

As the video I posted and the table the other guy posted you don’t have to save forever, just enough to kick start the compounding flywheel.

 

[Belli]

People get too wrapped up with money.

True that. While having sufficient funds is an important issue to consider, if it's a priority over building and maintaining relationships I do consider that's the losing side.

My 2 cents.

 

[Smurf1976]

If you run out, sell part of the house.

Assuming you're referring to a reverse mortgage, how well protected is the owner in that case?

Does the law ensure the bank can't ask for repayment, force a sale or similar?

I can see many being uncomfortable with it unless the law's extremely watertight to the effect the owner can't possibly be forced to repay before death no matter what.

 

[Belli]

Assuming you're referring to a reverse mortgage, how well protected is the owner in that case?

Does the law ensure the bank can't ask for repayment, force a sale or similar?

I can see many being uncomfortable with it unless the law's extremely watertight to the effect the owner can't possibly be forced to repay before death no matter what.

Can impact matters such as eligibility for the age pension.

Reverse mortgage and home equity release - Moneysmart.gov.au

Understand how a reverse mortgage or other equity release product works. Get independent advice before you go ahead.

moneysmart.gov.au

 

[Value Collector]

Assuming you're referring to a reverse mortgage, how well protected is the owner in that case?

Does the law ensure the bank can't ask for repayment, force a sale or similar?

I can see many being uncomfortable with it unless the law's extremely watertight to the effect the owner can't possibly be forced to repay before death no matter what.

Generally it’s part of the contract that the house can never be sold unless you die or decide to move out, and the loan can never be greater than the value of the house.

To counter this reverse mortgage companies are generally pretty conservative with the amount they let you extract.

 

[Belli]

Wasn't there some weird stuff where on partner had to move into residential aged care and the other remained at the house? I read about it but I cannot remember which publication it was. It was a few years ago though.

 

[Value Collector]

True that. While having sufficient funds is an important issue to consider, if it's a priority over building and maintaining relationships I do consider that's the losing side.

My 2 cents.

One unfortunate side affect I have learned the hard way, is people start to treat you different if they think you are doing ok with money.

So when it comes to family, definitely down play it as long as you can.

 

[Knobby22]

Assuming you're referring to a reverse mortgage, how well protected is the owner in that case?

Does the law ensure the bank can't ask for repayment, force a sale or similar?

I can see many being uncomfortable with it unless the law's extremely watertight to the effect the owner can't possibly be forced to repay before death no matter what.

From Bendigo Bank.
Just stay away for the big 4. Reverse mortgages are a con.

Homesafe Wealth Release is not a loan or a reverse mortgage, but a way to sell a share of the future value of your home and receive the cash you need today*. There are no repayments and you remain the owner of your home until you choose to sell.

Also government has a scheme.

https://www.google.com.au/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.dss.gov.au/our-responsibilities/seniors/benefits-payments/home-equity-access-scheme%23:~:text%3DThe%2520Home%2520Equity%2520Access%2520Scheme%2520(previously%2520known%2520as%2520the%2520Pension,to%2520supplement%2520their%2520regular%2520income.&ved=2ahUKEwiR8eXylcGDAxVaS2wGHd3AAy0QFnoECAgQBQ&usg=AOvVaw2JdxnBqYSZCfanUgJyQAtU

 

[Belli]

One unfortunate side affect I have learned the hard way, is people start to treat you different if they think you are doing ok with money.

So when it comes to family, definitely down play it as long as you can.

Ah, the "You can afford it" syndrome. Yes, also make absolutely sure your children super glue their lips together when it come to money, especially if they have their own say from a Will, or they may find others wanting to be their BFF which may not be desirable.

 

[qldfrog]

start early, live within your means.
View attachment 168248

Ok on principle, the 10% annual return year on , after tax is BS..but yes demonstrates the concept

 

[qldfrog]

For me it has always been placing myself and my family in a position that we/I don’t need to be concerned with Future “ What ifs “ .

50 years ago I remember as clear as crystal sitting at the laminex Kitchen table with my first wife both 20
We had just combined our fortnightly wages and considered a budget.
There was $10 left for Julie and I .

I remember looking at Jules and shaking my head
I said “ I don’t know about you but I can’t live like this!”

I /we didn’t and haven’t.to this day although Julie and I are no longer together

My simple method and opinion soon.
Starting With
Being a regular/standard P.A.Y.E employee JUST WONT CUT IT !

Fully agree with your last sentence. I just went with my own one man company and 15y of that was enough to give me a chance to be in the China based startup (no financial gain there but at least I had the opportunity) and self retired at 53.
At the very least self contracting, own company and even better own businesses.

It would be very interesting to know the background of ASF members and percentage of
Payg private/ public,
Self employed/business owner.
The previous comment of living within means and saving mindset is also obviously required

 

[qldfrog]

$300K is enough.
People get too wrapped up with money.
You have to spend it though. (20k a year + pension.)
If you run out, sell part of the house.

You assume pension , in current state, it is enough for the average Australian with current pension system.
I agree....but ask an Argentinian how this can go awoc

 

[qldfrog]

Assuming you're referring to a reverse mortgage, how well protected is the owner in that case?

Does the law ensure the bank can't ask for repayment, force a sale or similar?

I can see many being uncomfortable with it unless the law's extremely watertight to the effect the owner can't possibly be forced to repay before death no matter what.

And being Australia, we can have retrospective laws, a concept hard to believe in many real democracies ..
So this is a no go for me and rely on the RE market remaining incredibly high

 

[IFocus]

At least one confirms my opening statement re P.A.Y.E employment.

Nah P.A.Y.E my whole life (someone has to pay tax) wasn't hard to get enough to retire although trading and property played a part.

 

[Dona Ferentes]

Ok on principle, the 10% annual return year on , after tax is BS..but yes demonstrates the concept

why so?


Mirrabooka MIR- small cap LIC .
buy in super for the low-tax benefit, reinvest dividends

 

[Dona Ferentes]

Nah P.A.Y.E my whole life (someone has to pay tax) wasn't hard to get enough to retire although trading and property played a part.

ditto.

EDIT: luck helps

 

[tech/a]

Nah P.A.Y.E my whole life (someone has to pay tax) wasn't hard to get enough to retire although trading and property played a part.

ditto.

EDIT: luck helps

Right Place Right Time and being in the position to take action
and DOING SOMETHING.

How do you think both of you would have gone without "Luck" and or Trading and property?
Simply a P.A.Y.E wage earner (Perhaps along with your wife).
Even worse if you were 20-30 NOW and starting on your journey. (After Education).

 

[Value Collector]

Right Place Right Time and being in the position to take action
and DOING SOMETHING.

How do you think both of you would have gone without "Luck" and or Trading and property?
Simply a P.A.Y.E wage earner (Perhaps along with your wife).
Even worse if you were 20-30 NOW and starting on your journey. (After Education).

What does it matter where you get your money from? The important thing is not to spend all of it, and put those savings to work.

Plenty of self employed people fail to save and invest, some don’t even put money into super.

—————-

I really think you fail to see the benefits of compounding, you seem to think the only way to success is doing something special, but most fortunes come through simple compounding.