All Topics / Opinionated! / Financial Freedom Plan work out

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of alexluualexluu
    Participant
    @alexluu
    Join Date: 2018
    Post Count: 0

    Dear Members,

    It is the 1st time i am being this forum. I got direct to the forum from Steve’s Book “0 to 130 in 3.5 years”

    I am still struggle to set up my financial freedom long term plan.

    My Goal: $5000 per week passive income in the next 5 years (2025)

    Current situation:
    Family of 3 kids. Owning a small bakery business in Vic. My weekly net profit $5000 pw for our whole family after all business and family expenses.
    Renting upstair the business.

    Portfolios:
    1. In NSW. Purchased $525K. Owning $466K. Valuation $650k. Rent $1550 per month
    2. In SA. Purchased $260k. Owning $205k. Valuation $280k. Rent $1500 per month.

    what should i do to reach my goal under the time frame? Do current market still got any 8% Commercial Property like Steve stated on the book as i am not familar with Commercial Property.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    $5k pw is about $250k pa after tax. or about $400k before that

    To get to this level you would need about $10mil in unencumbered assets yielding 4% after costs. That might mean 25 $500k properties all fully paid off.

    That would be very difficult to do.

    To make it easier

    a) structure it to be more tax effective – so you might only need $300k pa before tax.

    That would still mean $7.5mil in unencumbered assets

    b) try to get a higher return. if you could get  a 5% return that would mean $6mil in unencumbered assets.

     

    But you already have $5000pw so aren’t you already there?

     

     

     

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 284

    Good Day Alex,

    So given to add on the breakdown provided by Terry.

     

    1. if your goal is 250k PA passive income off your portfolio, is this just property? I will presume the plan is to use the revenue from your business of which there is excess & use this to grow your portfolio base further?

    2. what should i do to reach my goal under the time frame?

    Study if this is reasonable given the timeframe, portfolio, excess cashflow & start planning a path to achieve this goal

     

    3. Do current market still got any 8% Commercial Property like Steve stated on the book as i am not familar with Commercial Property.

    Yes, there are certainly commercial & residential properties that can achieve this yield & better.

     

    Alex this is possible given the right strategy & free cashflow to reinvest again and again but it’s worth considering your tolerance to risk & how your planning to structure can be done a multitude of ways.

    Wish you the best!

    Kind regards

    Jaxon Avery

    Disclaimer: This is general information only & may not be right for your situation or circumstances.

    Jaxon | Jaxon Avery – Financial Adviser
    http://www.jpafinancialservices.com.au
    Email Me | Phone Me

    JPA Financial Services Pty Ltd

    Profile photo of alexluualexluu
    Participant
    @alexluu
    Join Date: 2018
    Post Count: 0

    Hi Terry,

    Sorry to the late reply.

    Thank you for the advise.

    The current income $5000 per week is active income not active so need find a better income source :)

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi Alex,

    That sounds like a healthy business you have there.

    Owning a small bakery business in Vic. My weekly net profit $5000 pw for our whole family after all business and family expenses.

    Since this produces so much active Income, what if you made it Passive by employing others to run it?  I don’t know how many wages you’d need to pay, but I’m guessing it would still leave a very healthy passive income.  And you can then spend your time creating other assets, knowing that (if necessary) you could always go back to the active role if things got tight (either personally, or economy-wise).  Could that work for you?

    It’s an interesting scenario – thanks for posting it.  I’m interested to hear more….

    Benny

    Profile photo of Philip-GreenPhilip-Green
    Participant
    @philip-green
    Join Date: 2020
    Post Count: 0

    Thank you for the advise.

Viewing 6 posts - 1 through 6 (of 6 total)

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