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Hi Luke B.
I am no property investor but I am looming large for starting off….
I am in roughly the same boat as you. Essentially the interest payments on my home are $800 per month. Going by other rental in the area I could expect $330 a week which would mean CF+ if we moved out and rented out.
Im interested to see any responses on this topic.
I feel as though if we moved out and rented it out that would be a good start to a CF+ portfolio (by that I mean good equity and + cashflow) but – My wife and 3 kids need somewhere to live. I figure that if we rented then this would offset any +CF gains basically rendering the process useless.
If we bought another place the mortgage would be bigger.
Im a newbi, a novice – I dont know much at all.
I think what I will do is stay put and branch from here. Ideally Id like to get my living expenses down as much as possible and then somehow bring in some passive income to buy myself some more time in life. This is obviously the standard normal approach that so many speak of and dream of yet it seems few actually do. If success comes from doing things differently then perhaps this is bad option.
Anyhow long story short Id be keen to see what others have done when in this situation.
zimby wrote:Hey GuysI’m In the IT game as well, debating weather to go contractor or not.
Money seems really good, through the company my chargeout rate is around $160-180 p/h
If I left 3 customers have already said they would follow me.
Bear/Pat what you guys think, i’m 28yo and about to settle on first property.Becoming a contractor was the BEST thing I ever did.
It will do so many great things for your personal finances.
Here is a list of what it can do for you:
>>You get paid a much higher rate for taking on the risk of contracting.
>>You can filter all of your money into a company or a trust or BOTH. This allows you to offset income to lower thresholds (your wife most likely – for me my wife is a SAHM so its perfect). If you have kids you can utilise trusts to divvy off income there as well. This provides massive savings in TAX and a lot of flexibility.
>>You have to pay income tax quarterly. This allows you to keep those funds in a mortgage redraw/offset account which will rapidly drive down your interest bills. Saving money on interest is not viewed as profit therefore it is not taxed = massive savings here too.
>>When running a company you make deductions on many many many more things then you can as a PAYG. If you run the company from home you can write off power/gas/maintenance – cars, computers, stationary… The list goes on and on. This combined with income splitting and being able to withhold tax payments for 3 months at a time provides MASSIVE long term benefits and savings.
I WILL NEVER GO BACK TO PAYG. Paid holidays, Sick leave pfft whatever. Ill be on paid holidays for the rest of my life much sooner by sucking it up now.There are negatives (of course):
>>Risk of job loss. In my contract I can be dismissed with one days notice. No questions – no nothing. If they say get out – Im out. I have no legal protection – no redundancy payout.
>>Setup & maintenance. Setting up a company, getting an accountant to help you run it, getting all of the insurance is expensive, time consuming and down right painful. Once again though – its worth it.
>>Paperwork. There is a lot of paperwork with running a company and it aint real fun.Honestly though I have been in the contracting game for 2+ years now. I have been able to triple my income (firstly) and then effectively quadruple it with tax savings and income distribution.
Ill steal another quote here because I love them… This one is from the guy who started Kogan… “If you think you can or think you cant you’re thinking too much – JUST DO IT”.
So, JUST DO IT. You’ll never look back.
Cheers.
OK – I have found this all to be pretty amazing. I am surprised at the amount of people who have commented and even more surprised at the number of people who started by saying “Bear09 I am just like you or Bear09 I know how you feel” – its really got me thinking.
I have to admit, my first post on this page was a breaking point for me. I am so sick to death of sitting in this office looking around at all of the other monkeys doing the same dam thing each day, using the same dam slogans each day – seriously I just know that I could do so much more.
I have had a chance to read the posts here and do some thinking. The first thing I need to change is my attitude. I have been inadvertently pessimistic in regards to a lot of things in life. I have been seeking out the negatives and the ‘what if’s’ for way too long. I have been looking to and reading about other successful people and seriously thinking “why not me?!”… Then I was honest with myself. Its not an easy thing to do – that is look in the mirror and tell yourself that your life is the way it is because you made it that way. Sure there is good luck and bad luck but ultimately if you are a sane and healthy person then you are in the drivers seat of your life. Its your choices that direct where you go or don’t go. A quote if I may which I have always liked by Wayne Gretzkey “You miss 100% of the shots you don’t take”… How true is that?
So I’d like to say thanks to the people on this post. This has been a real awakening for me. I am going to stop bitching and start living – one way or another. For god’s sake I have too much to be happy about to be wining about why things arnt going my way – how pathetic is that? 3 happy healthy kids, a lovely wife georgess (spelling) as hell, a great income (220k is not earth shattering but its nothing to sneeze at either), friends, family and OPPORTUNITY.
This is just the slap in the face I needed. I’ll be back on this post and that’s for sure….
Cheers.
Thanks heaps for that Nigel…
I am going to take your advice – for real this time. I am going to somehow find some spare time and write some things down.
I shall post back on how my journey progresses.
Thanks again.
I get really amazed when I see people make comments that define my life in a nutshell with such ease then, I get sad because I know its all true.
I am a 28 year old IT consultant. Im happily married and I have 3 beautiful happy healthy children. I earn 220k a year working as a contractor through my own company. Just writing that down and reading it back makes me think “why am I unhappy?”
Im not unhappy at home. I love my wife and I love my children. I love being with them and watching them grow. I get immense satisfaction from being a husband and a father. I have heaps of awesome friends and my parents and siblings are all wonderful people who I love and get along with great. I suppose by now this is not making much sense? People may read this and think “who is this guy – whats he got to say about not being happy – get over yourself”…
“Most people in life do not feel successful because they really do not know what they want. This often leads to low self-esteem and sense of failure.”
This is me. My job gives me very little satisfaction. I have NO forms of passive income. I have no investments. I have NO PASSION for what I do. I want to make a plan but I sit down to write it and I cant. I just sit there. I know Ill own my own home in about 2 years but then I think – “wow, youll be 30, no passive income, no investments and no idea. Big deal you own your home – youre still gonna have to work in a job that you dont like for the next 40 years”…See where I am at? My headspace is a mess. I should be the happiest dude in the world – and I am – AT HOME and with FAMILY but, work, passion, success – I feel as though I have none of that.
Rant over. The purpose of my post was merely to pay homage to the many people on this site (and mostly its founder) who have found passion and found success and satisfaction in their working lives. It is you people I envy and you people who I will become one way or another because I cant keep living like this – I need to start feeling alive!!!
Cheers and good luck to you – perhaps Ill post back here when I do whats required to make the CHANGE in my life. If nothing changes, nothing changes. Einstein’s definition of insanity “Doing the same thing over and over yet expecting different results”. Perhaps I have answered my own concerns here.
Thanks for reading my rubbish…
CHeers.
